The Securities and Exchange Commission (SEC) has provided an explanation for its ban on Independent Directors moving into Executive Director positions within the same company or group.
According to the Commission, permitting Independent Directors to take on executive roles contradicts the fundamental tenet of board independence and diminishes the significance of having an unbiased voice in company governance.
The commission introduced a three-year cooling-off period before a CEO can be appointed as Chairman of the same company, stating that this is intended to strengthen corporate governance and ensure a clear separation of roles and oversight.
About The Author
