Leading Reasons to have Independent Board Members
Ensuring you have an independent board member on your board is tantamount to ensuring your company makes use of an independent auditor. It is imperative to have an independent perspective of the current performance, strategic direction and operation strategies of the business, not one that could be swayed by power, being a family member, job status or seniority on the board. Lets define what independent means in this scenario. An independent board member is not a director, shareholder, employee nor do they have any capital invested in the business, you could see them as a paid consultant that is intellectually involved in the success and growth of the business.
Based on our recent survey, statistically it is shown that boards that comprise of at least one independent board member outperforms those that do not have any. It goes without saying, the more independent board members on a board, the higher the impact the board will have on the company performance. When asked about the various directors and the value they add to the board, Independent Board Members were the least likely to be removed as the contribution they add is vital. Along with higher performance, the survey showed that boards with Independent Board members are more likely to implement a performance evaluation process which is strongly recommended in most African governance codes.