Shadow Banking by Roy J. Girasa

Author:Roy J. Girasa
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

4.5 Commentary on Director Independence

The major complaint concerning the imposition of enhanced prudential standards on General Electric Capital Corporation Inc. (GECC) was the requirement of additional independent directors to the Board to the already existing independent directors. The meaning of director independence can be gauged from a number of sources. The ENRON debacle led to the enactment of the Sarbanes-Oxley Act of 2002. §301amended the Securities Exchange Act of 1934 regarding the responsibilities of the audit committee of a publicly traded company with respect to registered public accounting firms. Each member of the audit committee is to be a member of the board of directors and shall be independent. The statute states that in order to be considered independent a member of the audit committee “may not other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee accept any consulting, advisory, or other compensatory fee from the issuer; or be an affiliated person of the issuer or any subsidiary thereof.” 76

The New York Stock Exchange is much more explicit in defining the meaning of director independence. In its Listed Company Manual defines independent director as one where:The board of directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder, or officer of an organization that has a relationship with the company);

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.