- Special knowledge
- Personal qualities or expertise
* Such independence may be compromised by alignment to a particular interest e.g. that of a group or holding company. In that case, the NED cannot normally be construed as independent. On certain issues such Directors my need to recuse themselves from debate. However, on many issues there will be no conflict and the presence of such Directors may provide insights and experience which is to the benefit of the Board.
In other words, that status, in itself, does not invalidate a NED’s role, but it does take on a particular characteristic, in that the NED in question may seek to introduce checks and balances from, say, a parent company, or exercise a degree of oversight from a specific perspective.
The IoD indicates that Executive management should use their NEDs to provide general counsel and a different perspective on matters of concern. Executive management may also seek NEDs’ guidance on particular issues before they are raised at Board meetings. Indeed, some of the main specialist roles of a NED will be carried out in a Committee of the Board.