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Hello sir,
in some texts, there is a distinction between NEDs and independent NEDs. What is their difference, please? Thank you again.An executive director cannot be independent (clearly*). A director who is described as independent must be non-executive. But not all NEDs have to be independent – they could be shareholders for example.
To fulfil specific roles in corporate governance, the UK Code (for example), specifies that the members of the audit committee (and remunerations committee) should be all independent NEDs (minimum 3 – or 2 for a smaller company). Only a majority of the members of the nomination are required to be independent NEDs.*They are employed, may have share options, are likely to participate in the company’s pension scheme, may have served on the board for a long time (more than 9 years).
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