Determination by the Board. Under Module HC an 'independent director' is a director whom the board has specifically determined has no material relationship which could affect his independence of judgment, taking into account all known facts. The board should consider that, although a particular director meets the formal requirements, he may not be independent owing to specific circumstances of the person or the investment firm licensee, ownership structure of the investment firm licensee, or for any other reason. The board's determination should be a good faith finding after diligent review and full discussion.
Formal Requirements. 'Independent director' means a non-executive director of the investment firm licensee who, or whose family shareholders either separately or together with him or each other, does not have any material pecuniary relationships or transactions with the investment firm licensee (not counting director's remuneration for this purpose) and in particular who, during the one year preceding the time in question met all the following conditions:
(a) Was not an employee of the company;
(b) Did not:
(i) Make to, or receive from, the investment firm licensee payments of more than 31,000 BD or equivalent (not counting director's remuneration);
(ii) Own more than a 10% share or other ownership interest, directly or indirectly, in an entity that made to or received from the investment firm licensee payments of more than such amount;
(iii) Act as a general partner, manager, director or officer of a partnership or company that made to or received from the investment firm licensee payments of more than such amount;
(iv) Have any significant contractual or business relationship with the investment firm licensee which could be seen to materially interfere with the person's capacity to act in an independent manner,
(c) Did not own directly or indirectly (including for this purpose ownership by any family member or related person) 5% or more of the shares of any type or class of the investment firm licensee;
(d) Was not engaged directly or indirectly as an auditor or professional advisor for the investment firm licensee, and
(e) Was not an associate of a Director or a member of senior management of the investment firm licensee.
For purposes of this definition, the 'payments' referred to in paragraph (b)(i), (b)(ii) and (b) (iii) do not include monies received from dividends and investment accounts; reference to such payments only applies to contractual payments for services rendered to the licensee by the director or company concerned, or paid (or payable) by the concerned director or company to the licensee for services provided by the licensee.
Dividends and investment accounts are to be considered under item (b)(iv) of the definition.
For the purpose of the definition of "independent director":
(a) Where the term "family" or "family member or related persons" is used reference is made to: spouse, father, mother, son(s) or daughter(s); and
(b) Where the term "associate" is used reference is made to:
(i) Spouse, father, mother, son(s) or daughter(s); or
(ii) A person who is an employee or partner.
Amended: January 2012
Amended: October 2011
Added: January 2011
