The board should determine whether a director is independent in character and judgement and whether there are relationships or circumstances (including financial dependence on his relationships with the Company) which are likely to affect or could appear to affect, the director’s judgement.
The circumstances which may appear to impair a non-executive’s independence include if the director:
- has been an employee of the Company or group within the last five years;
- has, or has had within the last three years, a material business relationship with the company either directly, or as a partner, shareholder, director or senior employee of a body that has such as relationship with the Company;
- has received or receives additional remuneration from the Company apart from a director’s fee, participates in the Company’s share option or a performance-related pay scheme, or is a member of the Company’s pension scheme; has close family ties with any of the Company’s advisers, directors or senior employees;
- holds cross-directorships or has significant links with other directors through involvement in other companies or bodies;
- is or represents a significant shareholder; or
- has served on the board for more than nine years.
For avoidance of doubt, the fact that a director is or has been paid by the Company wholly or partly in shares would not be considered of itself to impair his independence.
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