An independent director has no material relationship with the company in which he or she serves as director. An independent director cannot be employed or have a family member employed by the company. Such directors are important because they bring unbiased opinions regarding the company's decisions and diverse experience to the company's decision-making process.
The Asian Corporate Governance Association (ACGA) has published a useful overview of the rules and recommendations regarding independent directors in Hong Kong, China, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand. For example in Hong Kong as per the rule the board should consist of at least three independent directors and the recommendation of ACGA is at least one third of the board should be independent directors. Full report.
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