outside director

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Outside director

A director of a company who is not an employee of that company and brings in outside experience to help make board decisions.

Outside Director

A member of a publicly-traded company's board of directors that is not otherwise employed by or engaged with the company. That is, he/she does not represent shareholders or major executives in the company. Outside directors are thought to be advantageous because they offer objectivity and have little or no chance of conflict of interest. However, there is the possibility that an outside director might be unengaged with the issues involved in the company's governance. The Sarbanes-Oxley Act of 2002 mandates that a certain percentage of boards of directors be outside directors. It is illegal for outside directors to sit on multiple boards in the same industry as this may result in conflicts of interest.

outside director

A member of a firm's board of directors who is not employed in another capacity by that firm. An example is the president of one firm who serves as a director of another firm. Some people believe that at least some outside directors are needed to give a board balance and to protect stockholders' interests. Compare inside director.
References in periodicals archive ?
Further, for a further period of 5 years each, with Postal Ballot, members have also named exiting independent directors Shri S S Kohli and Shri K Ravikumar pursuant to Section 149 of the Companies Act, 2013.
We said independent directors should not be related to any member of the board or the company owners, but that's very difficult to achieve in a culture or country like ours where everybody is connected whether by second or third degree," Bu Saidi told Gulf News in an interview.
Republic Airways Holdings Inc's (NASDAQ:RJET) board of directors on Thursday announced it has appointed David N Siegel as lead independent director of the airline holding company's board.
Under the requirement of the FSC, 14 listed firms with paid-in capital reaching NT$50 billion and all financial institutions started to institute independent directors in 2007.
With eight independent directors and over 30 professional staff leveraging proprietary leading-edge technology, dms Management Ltd.
Unlike policies with limits shared across an entire board of directors, or a group of independent directors, this policy is written to cover a single director.
These independent directors should ideally have knowledge of investing in private companies in order to guide and navigate through the tough valuation and other financial transaction issues that typically rock the board.
Although IDL insurance offers some benefits to independent directors not afforded by other types of D & O policies, IDL has not sold well since it was introduced several years ago.
As for exercising a duty of care, the independent directors have no way of accomplishing that.
In short, monitoring by independent directors has proven insufficient.
The time commitment for attending meetings varies from annually to monthly, and you can expect other independent directors to be bright, friendly and intelligent.
Section 150 of the Companies Act, 2013 provides for creation and maintenance of database of Independent Directors.

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