7.3.2.1 Board structure and composition

The composition/structure building block in the United Kingdom is strong as well. The majority of the unitary board structure, excluding the chairman, must comprise a majority of independent NEDs. Although a majority of independent NEDs is required, the balance between executive directors and NEDs must be appropriate, such that no individual or small group can dominate the board’s decision making. The requirement of an appropriate balance between executive directors and NEDs prevents a situation in which independent NEDs dominate boards. A situation with one powerful CEO and NEDs only, which is more common in the United States, is therefore less likely.