13.2.1.0 Introduction

For the definition of independence and what constitutes independence, three different types of independence must be distinguished: independence in fact, in appearance and in form. These are shown in the left panel of Figure 13-2. Independence in fact entails having an independent mindset when executing tasks, which results in unbiased work of the supervisor. Independence in appearance entails avoiding facts and circumstances that are so significant that a reasonable and informed third party would question the supervisor’s independence. Independence in form entails compliance with the relevant independence criteria.

Figure 13-2: The relationships between independence in fact, in appearance and in form (left) and the three building blocks of independence: person, composition/structure and preconditions.

Independence is defined as a situation in which a supervisor is independent in fact and in appearance. Such a supervisor has an independent mindset that leads to unbiased work and there are no facts and circumstances that are so significant that a reasonable and informed third party would question the supervisor’s independence. In order to determine his independence (in form) the independence criteria from the disinterested outsider model – with a focus on the lack of ties with the company and its management – should be used. This definition should also include requirements about the ability, competence and quality of the objective monitor model and the time commitment requirement of the unaffiliated professional model.