11.4.5.1 Person building block

The definition of independence should include the prohibition of payments to NEDs other than their salary as a director. Side payments to directors in the form of consultancy contracts or charitable contributions should be prohibited or be a reason not to be qualified as independent. By adjusting these side payments, the CEO can influence the independent directors. Therefore, such payments must be considered a hindrance to independent supervision. A more stringent definition of director independence should avoid the lack of impartial leadership and therefore decreases the probability of groupthink. The prohibition of performance-based remuneration also decreases the probability of group cohesion. (O’Connor 2003: 1261-1262, 1299-1300). All three countries have an independence criterion in their corporate governance code that covers payments to supervisors. The difference is that the United Kingdom and the Netherlands consider all payments other than the salary of the supervisor to be a hindrance to independence, whereas Sweden is only concerned about a ‘not insignificant remuneration’.