Role of Independent Non-Executive Directors Essay

Role of Independent Non-Executive Directors - Essay Example Perhaps the most summarized in the Federal Law "On Joint Stock Companies", which refers primarily to the independence of Board members from the management. Incidentally, the definition of "independence" of directors is given in Sec. 9, "The interest in the commission of public transactions," so this definition can be regarded as purely utilitarian. A much more detailed vision of independent directors make the Code of Conduct and the Association of investor protection . Last added to the list of groups that should not affect the directors, yet the state, as well as major shareholders and partners of the company. Perhaps, except for employees (excluding top management), lists all of steykholde-ditch. However, if we take into account our current realities, placing the company's employees to the stakeholders (directly or through participation in trade unions) will be more a tribute to the generally accepted world practice, rather than a reflection of reality (Arbouw, 2004, pp. 8). Thus, in the most general case, it can be argued that an independent director is independent from all stakeholder groups. Of course, there is a statistic that confirms that the involvement of independent directors correlates with the high efficiency of enterprises and their degree of success. Moreover, already in 1992 Cadbury report was published, which stated that "the level and number of non-executive directors on the board of directors shall be such that their views have made a significant contribution to the decision of the Board of Directors". Later, in 1998, these provisions were reaffirmed in the group, Sir Ronald Hampel of the fundamental principles of corporate governance. However, I venture to suggest that the need for independent directors in the UK there was still earlier than the institution of independent directors. In his article, M. Samosudov concludes that, in speaking of "independence" of directors, "to talk about the independence of judgments of the Board of Directors ( Barratt, 2002, pp.9). That is understood that members of the board of directors and board of directors as a whole should be in every situation to express opinions, make decisions, guided solely by considerations of their own professionalism and efficiency of the company as a whole, but not by considerations of any individual participants of corporate relations. â€Å"Then we come to the following conclusion: the independent director is a highly qualified specialist who can satisfy the needs to implement the functions and exercising the authority of the Board of Directors the most effective way, regardless of the views of various stakeholder groups. Main Body From this definition we can draw three conclusions. First, an independent director - not a position, and the profession, such as, for example, an electrical engineer or an accountant, with all ensuing consequences. Secondly, any shareholder, being of sound mind and memory of, must carry out the appointment of board members only from among the independent directors (the best, besides no one is appointed by, say, a professional accountant to the position electrician). And thirdly, to the service must be approached with the same criteria as any other service or any other product: the light of its value (how effective or that the applicant) and prices (the value of his services). As an option - to hold a competition for filling vacant board member. It is clear that, if we exclude from consideration all animate objects, the "Company" is a mere collection of assets and related liabilities to shareholders and third parties. Therefore, to talk about the "public interest" makes no sense. However, there are a lot of sense to talk about the interests of employees and its top managers. In this case we have to, first, to