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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Despite this requirement, however, the corporate world has been fraught with stories of business failures and bankruptcies that debunked the importance and relevant role of independent directors in the ultimate protection of stockholders' interests.
(NYSE: NSAM) has formed a special committee comprised of the three NSAM independent directors, who are not on the board of NorthStar Realty Finance Corp., to continue the previously announced strategic alternatives process, the company said.
The letter called for the inclusion of independent directors to address governance challenges confronting cricket.
If you doubt that, just think of the dismal performance of the scores of independent directors on the boards of Bear Stearns, Lehman Brothers, AIG, Merrill Lynch, Citigroup, Bank of America, and the smaller financial services firms that have gone bust or required massive public resuscitation in the 2007-2008 financial crisis.
In certain circumstances, we see the presence of these independent directors as transforming corporate boardrooms into a "war zone" of ideologies, even egos.
To help those directors, and other corporate managers, Chubb Group has created a free 35-page book, "Loss Prevention Guidelines for Independent Directors." The book addresses corporate governance best practices, how to select and retain independent directors, and how independent directors can best be used.
Congress and the exchanges also have gone too far in defining director "independence." A number of studies conclude that independent directors do not necessarily make better directors.
The report found that annual cash fees for independent directors of major quoted companies in the US, UK and Germany were similar, typically ranging from around pounds 25,000 to pounds 40,000.
The PSX director, the issue had spiraled out of control due to problem over election of independent directors.
The draft amendment was made in the 'Securities Exchange (Licensing and Operation) Regulations 2016' by reducing the composition of independent directors to 'one third' at the PSX board, which was 50 per cent of it.
(Alliance News) - Mining company Ferrexpo PLC on Monday said it appointed Vitalii Lisovenko as senior independent director with immediate effect.

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