Boardroom independence is not enough

Boardroom independence is not enough
Document type
Barker, Roger
Institute of Directors
Date of publication
26 January 2009
Management & leadership: including strategy, public sector management, operations and production
Business and management
Material type

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A report argues that independence of directors is not always effective in ensuring good corporate governance. It is suggested that in many examples of corporate governance failure, non-executive directors failed to exert proper influence as a result of a lack of subject knowledge, rather than a lack of independence. In highly complex and specialised sectors such as financial services and high technology, non-executive directors may be unable to comprehend corporate processes or the true advantages, disadvantages, and risks of corporate decisions, and be unable to properly evaluate the information and arguments provided to them by executive management.

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