Imagine a corporate boardroom.
The CEO gives an update. Heads nod. Minutes are noted. Everyone goes home. It’s civil, efficient… and potentially catastrophic.
Welcome to the myth of the independent director—a role meant to ensure accountability and good governance, but too often reduced to a decorative checkbox. When independence is treated as a formality rather than a function, it opens the door to groupthink, complacency, and preventable crises.
Let’s explore why true independence isn’t about who you are not, but about how you think, act, and lead.
Beyond Labels: Why Independence Is a Mindset, Not a Checkbox
Most governance frameworks define an “independent” director by what they’re not—not an executive, not related to the CEO, not a major shareholder. These criteria aim to avoid conflicts of interest, but they don’t guarantee independent judgment.
Numerous studies show that formally “independent” directors still fail to challenge management. They might maintain social ties, owe past favours, or simply be unwilling to rock the boat. As one governance expert put it: “Real independence is a mindset—it’s about the courage to challenge, the clarity to question, and the freedom to think for yourself.”
Without this, even a fully “independent” board becomes a rubber stamp.
Competence Matters: Independence Without Expertise Is Dangerous
Independence is toothless without knowledge.
Take the infamous case of Theranos: its board included generals, senators, and ex-cabinet secretaries. Impressive titles, but none had healthcare expertise. The result? They missed the fraud entirely.
Or consider Satyam in India, where eminent professors and regulators sat on the board, yet failed to prevent a massive accounting scandal. Many resigned in disgrace.
The lesson is clear: true independence demands not just integrity, but competence. Directors must understand the business, ask the right questions, and stay curious enough to probe deeper.
Accountability: The Missing Piece
Too often, independent directors avoid consequences when things go wrong. They resign quietly. Their reputations remain intact. But this is changing.
From Enron to Wirecard, and from IL&FS in India to Steinhoff in South Africa, investors and regulators are demanding more. Independent directors are now being held accountable through votes, legal action, and public scrutiny.
And rightly so. Governance is not a passive role. Directors who collect fees but dodge responsibility do more harm than good.
What Makes a Truly Independent Director?
It’s time to raise the bar. True independence means:
✔ A Courageous Mindset – Willingness to speak truth to power, challenge assumptions, and resist groupthink.
✔ Competence & Preparation – A strong grasp of industry dynamics, finances, and governance duties.
✔ No Conflicts or Loyalties – Free from ties (financial or social) that cloud judgment.
✔ Accountability – Active engagement, ethical vigilance, and readiness to face consequences when things go wrong.
Global Lessons: Towards Substance Over Form
Governance codes are evolving. The UK Corporate Governance Code now emphasises constructive challenge over checklists. South Africa’s King IV advocates for substance over form—“apply and explain” instead of “comply or explain.”
To achieve this:
- Boards must professionalise nominations. No more hand-picked friends—independent directors should be selected for courage, diversity of thought, and expertise.
- Training and onboarding must be rigorous. Understanding the business shouldn’t take a year.
- Board culture must welcome dissent. The chair must set the tone: respectful challenge is not disloyalty—it’s a duty.
Independence Is Not the Goal—Good Governance Is
Independence is a means, not an end. The real goal is to strengthen companies through oversight, balanced power, and thoughtful decision-making.
When done right, independent directors prevent crises. Even better, they enable innovation, challenge assumptions, and keep leadership grounded in reality. They are not “watchdogs” or “yes-men,” but critical friends of the company.
Final Thought: The Riddle of the Polite Boardroom
If a board nods in unison and no one dissents, is that good governance, or just good manners?
Let’s stop being polite. Let’s start being independent—for real.
