Independent director
An independent director is assessed as able to exercise objective judgement without relationships or circumstances that compromise independence under the applicable governance criteria. Independence is distinct from merely being non-executive. Financial, business, personal or other connections and length of service may be relevant, depending on the framework. Independence supports effective challenge but must be accompanied by competence, time and engagement.
Worked example
A proposed NED recently held a senior executive role in the company. The nomination process considers whether that connection prevents an independence classification under the applicable criteria, rather than assuming every outside appointment is independent.
Common mistake
Do not substitute personal confidence in fairness for the required independence assessment, or assume the same criteria apply in every jurisdiction.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| ACCA | SBL | Direct | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |