NEDs and the responsibilities of the board

Who are the NEDs?

Who are the independent NEDs?
What about the non- independent NEDs?
How do the NEDs contribute to board
performance?
 Constructively challenge, ask penetrating
questions and be satisfied that decision is
correct
 Be involved with and contribute to
strategy
 Be satisfied that internal control and risk
management systems are in place
 Be satisfied with the procedure and the
outcome of the nominating and
remuneration processes including
transparency of criteria
 Be satisfied that there is integrity in the
preparation and disclosure of financial
reports

Criteria and exercise of independence of

NEDs (assuming qualified to be a director
in the first place)
 Not dependent on the company for
income directly or indirectly, employment
or otherwise
 Neither family connections with top
management (spouse, parents children
and children’s spouses)
 Nor business partner or company in which
director has substantial holding having
business dealings with the company
 Not having significant shares of the
company
 Not within the last few years a CEO of the
company
 Not a provider of professional services to
the company

Why cant executive directors be

independent?
1. They report to the CEO
2. They rely on the company for their
remuneration