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F1 BPP ST(August 2020) [Unlocked by www.freemypdf.com] (1)

lack independence
. (For example, potential 
non-executive directors are more likely to agree to serve if they admire the company's Chair or its 
way of operating.) 
(b) 
There may be a 
prejudice in
certain companies
against widening the recruitment of non-
executive directors to include people proposed other than by the board or to include stakeholder 
representatives. 
(c) 
Non-executive directors may have 
difficulty imposing
their views upon the board. It may be easy 
to dismiss the views of non-executive directors as irrelevant to the company's needs.
(d) 
Perhaps the biggest problem which non-executive directors face is the 
limited time
they can 
devote to the role. If they are to contribute valuably, they are likely to have other, time-consuming 
commitments.
BPP Tutor Toolkit Copy


PART B: BUSINESS ORGANISATION STRUCTURE, FUNCTIONS AND GOVERNANCE 
 
188
 
3.10.4 Independence of non-executive directors 
Various safeguards can be put in place to ensure that non-executive directors remain independent. 
Those suggested by the corporate governance reports include: 
(a) 
Non-executive directors should have 
no business

financial
or other 
connection
with the 
company, apart from fees and shareholdings. Recent reports such as the UK's Higgs report have 
widened the scope of business connections to include anyone who has been an employee or had 
a material business relationship over the last few years, or served on the board for more than ten 
years. 
(b) They 
should 
not take part
in
share option schemes
and their service should not be pensionable, 
to maintain their independent status. 
(c) 

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