AFFIRMATIVE

INDEPENDENT DIRECTOR SHOULD BE ACCOUNTABLE SIMILAR TO NON-EXECUTIVE DIRECTOR

 STAND
 SUBSTANTIVE (BRIEF)
 DEFINE
 SUBSTANTIVE (DETAIL)
 REITERATE STAND

1st Speaker (Proposition)

Independent Director SHOULD be accountable similar to Non-Executive Director for their expertise
in the particular field of business.

a. Appointment of independent directors are normally based on their expertise (therefore,

they should be able to form their opinions independently)
b. Main purpose is to provide third opinions, independent opinions, and their expert opinions
with regards to the business

ELABORATION

a. Appointment of independent directors are normally based on their expertise (therefore,

they should be able to form their opinions independently)
o Because as compared to non-executive directors, independent directors are
appointed for their expertise. Therefore, they should be equally as accountable as
non-exec directors as the opinions they bring to the table would often influence the
decisions that would be made for the company.
o For example, an oil and gas company would more likely to appoint someone who is
an expertise in the management of the business of oil and gas as their expert
opinions would be taken into account to make the right or better yet best decision
for the company.
o The values of independent directors are measured from their capability in bringing
and outside perspective into the board meetings as well as their ability to reflect
independence in their ideas, thought and views,
o Kingdom Seekers Ventures Sdn Bhd v Dato’ Sri Chong Ket Pen & Ors [2015] MLJU
390, Harmindar Singh Dhaliwal J highlighted in his judgment that “Independent
directors are required to exercise independent judgment and act in the best interests
of the company as per their declaration to Bursa Malaysia Securities Bhd (“Bursa
Malaysia”) as required under the Main Market Listing Requirement”.
o The independent directors assists in restoring leadership qualities of the board by
issuing a requisite report to the company members to advise on suitable remedies
taken in case of board’s poor performance. (KIV: RELEVANCE)
o An example of supervisory function can be illustrated in the case of QOGT Inc v
International Oil & Gas Technology Ltd [2014] EWHC 1628, where the independent
directors urged the company by issuing a notice in writing to the management
services team for them to work together constructively and cooperatively in order to
improve the company’s services. This is because the responsibility did not solely fall
on the manager alone, but also to the whole team involved. The notice form the
 independent directors was considered to be critical in order to avoid further breach
on the part of the management team for failure to provide appropriate services.

First speaker of the Government side’s 2 main substantives those are;

1. Independent Directors SHOULD be accountable similar to Non-Executive Directors because

the Independent Directors play a vital role in all circumstances and essential to enhance
the quality of the decision making process of a company

AND;

2. Also because Independent Directors are appointed to provide independent judgment in

their particular field of expertise.

Definition of the keywords in this argument.

The definition of “independent director" is stated under Chapter 1 of the Listing Requirement,
Paragraph 1.01 of the Bursa Malaysia Listing Requirements expressly defines independent
directors as a director who is independent of management and free from any business and other
relationship which could obstruct the exercise of independent judgment or the aptitude to
perform in the best interests of the company as a listed issuer.

Non-executive director is defined as someone who does not work for the company in a full-time
capacity. They do not participate in managing the company. Their job is not to run the company but
to keep a close eye on the managers and executive directors.

We can observe from the case of Vita Health Laboratories Pte Ltd and Others v Pang Seng Meng,
the high court made it clear that all directors owe the same degree of duties and responsibilities,
hence corporate powers imposed on directors regardless whatever type of directors they are, had
duties and responsibilities to the company. Making them equally accountable as much as the power
they were granted for.

The main role for Non-executive directors especially Independent Directors is to provide
independent judgment and outside experience and objectivity on issues that come before the board,
hence, making them a regular attendee at board meetings generally in regards to monitoring affairs
and accounts of the company.

Therefore, independent directors have the same degree of duties and responsibilities towards the
company’s welfare as Non-Executive directors, independent directors still need to perform the
minimum duties as a director and they also participate in appointment, assessment, planning, and
remuneration of the directors in the Company.

Even Though there is no legislative rule provided for the degree of duties owed by both independent
directors and non-executive directors, all directors have to assure that the company’s interests are
protected.

As we already established, appointments of independent directors are normally made based on their
expertise. Because as compared to non-executive directors, independent directors are appointed for
their expertise. Therefore, they should be able to form opinions independently. Their main purpose
in a company is to provide third opinions, independent opinions, and expert opinions with regards to
the business.Therefore, they should be equally as accountable as non-exec directors as the opinions
they bring to the table would often influence the decisions that would be made for the company.
For example, an oil and gas company would more likely to appoint someone who is an expert in the
management of the business of oil and gas as their expert opinions would be taken into account to
make the right or better yet best decision for the company.

The values of independent directors are measured from their capability in bringing an outside
perspective into the board meetings as well as their ability to reflect independence in their ideas,
thought and views,

Kingdom Seekers Ventures Sdn Bhd v Dato’ Sri Chong Ket Pen & Ors [2015] MLJU 390, Harmindar
Singh Dhaliwal J highlighted in his judgment that “Independent directors are required to exercise
independent judgment and act in the best interests of the company as per their declaration to Bursa
Malaysia Securities Bhd (“Bursa Malaysia”) as required under the Main Market Listing Requirement”.

From the case of QOGT Inc v International Oil & Gas Technology Ltd [2014] EWHC 1628, we can
observe an example of supervisory function that independent directors provide, where the
independent directors urged the company by issuing a notice in writing to the management services
team for them to work together constructively and cooperatively in order to improve the company’s
services. This is because the responsibility did not solely fall on the manager alone, but also on the
whole team involved. The notice from the independent directors was considered to be critical in
order to avoid further breach on the part of the management team for failure to provide appropriate
services.

To conclude, I would like to reiterate that we from the affirmative wholeheartedly agree that
Independent Directors SHOULD be accountable similar to Non-Executive Directors for their
appointments were made in order to attain their independent/expert of business regarding a
specific field of business to enhance the quality of the decision making process of a company.