How other countries deal with the matter

UNITED STATES

■ The NYSE and Nasdaq listing rules say independent directors must comprise a majority of the board

■ According to the DoddFrank Act, independence of directors is determined by whether the director or any family member has a material relationship with the firm (in the past 3 years)

■ To determine liability, a director’s skills, background and duties are considered, and standards of gross negligence are applied

■ A test for independent director isn’t mandatory

■ The National Association of Corporate Directors provides credentials to corporate directors. This is voluntary

UNITED KINGDOM

■ The Corporate Governance Code prescribes that in firms listed on the FTSE 350, at least half the directors must be independent

■ The individual must not have any material relationship with the company

■ Unlike the US, the standard of liability is one of negligence and not gross negligence

■ No mandatory requirement to pass a test

■ The Institute of Directors offers a qualification to become a “Chartered Director”, which is voluntary

AUSTRALIA

■ The ASX Corporate Governance Guidelines suggest independent directors comprise a majority of the board

■ Material relationships, family ties and crossdirectorships are considered to determine independence

■ The Corporations Act, 2001, does not distinguish between duties of executive and non-executive directors; 600 local laws impose personal liability on independent directors

■ No mandatory test

■ The Australian Institute of Company Directors offers courses for directors

CANADA

■ Law recommends that companies have ndependent directors in a majority on their board, and if not, must state the reason for it

■ The criteria for independence are a principle-based, hybrid approach, based on a material relationship with the company

■ No mandatory requirement for an individual to pass a test

■ The Institute of Corporate Directors, a not for profit organisation, offers several courses for directorship