What is an Independent Director?

An independent director, also known as an outside director, is a member of the board of directors who does not have a material or financial relationship with the organization. Independent directors are often a key part of good corporate governance to provide unique perspectives and backgrounds to the board. Indepependent directors are not employed by the company and are not involved in the day-to-day operations of the business. Shareholders select independent directors based on their expertise and experience in a specific field. Because they generally do not have conflicts of interest, they serve as a valuable resource to provide objective advice and insights to improve decision-making, leadership, and corporate strategies.