2.4.4 Comparison

Definitions of the concept of the disinterested outsider model focus on the lack of ties with the management and the company. Due to the lack of ties they are considered to be able to monitor independently and to serve the interests of the company and its shareholders. This is good practice and should therefore be used in the definition of independence. However, the disinterested outsider model focuses solely on the lack of ties with the company and its management, but does not pay attention to competences. The ability, competence and quality of directors are central themes in definitions of independence of the objective monitor model. By combining both underlying concepts, an independent director has no ties to the company and its management and can be unbiased, and he has the required ability, competence and qualities to ask the right questions and to make optimal use of his independence.

The unaffiliated professional model also demands directors who are experts in their fields, knowledgeable about the company’s operations and skilful in monitoring and advising management. The difference is that independent directors in this model should only serve as NED in order to let them have enough time for their job. These directors should be appointed and paid by the shareholders by – for example – the establishment of a non-profit organisation that recruits and educates directors and mediates in filling positions. However, this violates legislation in countries too much and might harm the interests of minority shareholders. The requirement to have NEDs who can spend sufficient time on their position is something that can be borrowed from this underlying concept of independence.