7.3.1 Person building block

The UKCGC’s approach regarding how to determine a NED’s independence is strong. The UKCGC offers seven independence criteria, but ultimately the board should determine whether a NED is ‘independent in character and judgement and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director’s judgement’. The final decision is therefore up to the discretionary power of the whole board. However, the board has to state its reasons if it determines that a NED is independent, whilst at least one of the seven independence criteria applies to him. By this methodology, the UKCGC does not only focus on independence in form, but also on independence in fact and appearance. This is a strong feature of the UKCGC from an independence viewpoint and it makes the person building block of independence robust.