In today’s briefing:
- Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence?
Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence?
- Some companies adopt policy of not granting performance-based compensation to outside directors to ensure independence. Given this, outside directors may have little incentive to leverage skills and knowledge in value-creation.
- Most independent board members also serve as board members of other companies, but very few companies have set clear standards for the number of concurrent positions that may be held.
- Although few companies disclose the criteria for the tenure of independent directors, the longest term was 12 years. ISS has set this as the standard in its voting guidelines.
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