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  • HC-1.4 HC-1.4 Independence of Judgment

    • HC-1.4.1

      Every director must bring independent judgment to bear in decision-making. No individual or group of directors must dominate the board's decision-making and no one individual should have unfettered powers of decision.

      January 2014

    • HC-1.4.2

      Executive directors must provide the board with all relevant business and financial information within their cognizance, and must recognise that their role as a director is different from their role as a member of management (see HC-2.3.2).

      January 2014

    • HC-1.4.3

      Non-executive directors must be fully independent of management and must constructively scrutinise and challenge management including the management performance of executive directors.

      January 2014

    • HC-1.4.4

      Where there is the potential for conflict of interest, or there is a need for impartiality, the Board must assign a sufficient number of independent board members capable of exercising independent judgement.

      January 2014

    • HC-1.4.5

      At least half of a licensee's board should be non-executive directors and at least three of those persons should be independent directors. (Note the exception for controlled companies in Paragraph HC-1.5.2.). Due to the nature of the business carried out by licensees, and government participation in such entities, government representatives are considered independent for the purpose of this Module.

      January 2014

    • HC-1.4.6

      The chairman of the board should be an independent director, so that there will be an appropriate balance of power and greater capacity of the board for independent decision making.

      January 2014

    • HC-1.4.7

      The chairman and/or deputy chairman must not be the same person as the chief executive officer (CEO).

      January 2014

    • HC-1.4.8

      The chairman must not be an executive director.

      January 2014

    • HC-1.4.9

      The board should review the independence of each director at least annually in light of interests disclosed by them, and their conduct. Each independent director shall provide the board with all necessary and updated information for this purpose.

      January 2014

    • HC-1.4.10

      To facilitate free and open communication among independent directors, each board meeting should be preceded or followed with a session at which only independent directors are present, except as may otherwise be determined by the independent directors themselves.

      January 2014

    • HC-1.4.11

      Where an independent director has served three consecutive terms on the board, such director will lose his/her independence status and must not be classified as an independent director if reappointed.

      Added: January 2020

    • HC-1.4.12

      Where a Chief Executive Officer of a microfinance institution licensee, who is also a Board member, no longer occupies the CEO position, whether due to resignation, retirement or termination, his/her Board Membership must also be immediately terminated.

      Added: January 2020