Insight - Independence and responsibility

David W. Berry: "If the ducks are not in a row, if the facts are in dispute, and there’s confusion about the best course of action, the world looks to the independent directors. This is especially the case when voices become louder, and positions become more entrenched."

BEING an independent director of a public-listed company (PLC) has its upside. There’s the status, of course, and the director’s fees. The work can be interesting as well, and there’s the opportunity to mix with prominent people, and be involved in making important decisions.

However, the job also means contributing to the management of the PLC’s affairs, not for personal benefit, but for the benefit of others. There’s a duty to do your best to protect the interests of the PLC and its stakeholders.

Most of the time, everyone is clear about what is the right decision. The facts support the recommendation, the executive and the primary advisers agree, and the major shareholders are aligned. The board has a collegiate approach, like many boards, and the independent directors “go with the flow”.