| The Board has a lead independent director to provide leadership in situations where the Chairman is conflicted, and especially when the Chairman is not independent. The lead independent director is available to shareholders where they have concerns and for which contact through the normal channels of communication with the Chairman or management are inappropriate or inadequate. |
A. Explanation
This Provision describes the rationale for and role of a Lead Independent Director (Lead ID).
There will be situations where the Chairman could be conflicted. These could be routine situations such as the assessment of the Chairman as part of the Board evaluation process. These could also be specific matters which involve or affect the Chairman for which some directors may not be comfortable openly discussing the matters in his presence.
For this reason, the recommendation is that the position of a Lead ID on the Board is to lead and facilitate the decision-making and resolution of matters where the Chairman is conflicted.
The Lead ID’s position is especially important when the Chairman is not independent. This is because there will likely be more situations and circumstances in which the Chairman is conflicted.
The Provision makes clear that the Lead ID can play an added facilitative role within the Board even when the Chairman is not conflicted, especially between the Board and shareholders or other stakeholders of the company. The company should clearly communicate to shareholders and stakeholders on how the Lead ID can be contacted.
Further guidance on the duties of the Lead ID duties can be found in the Nominating Committee Guide.
B. Practice Guidance
C. Related Rules and Regulations
- Nil.
D. CG Guides
- Board Guide 2.5: Board Leadership [Board Composition].
- Board Guide 2.9: Independence [Board Composition].
- Board Guide Appendix 1J: “Comply or Explain” – Examples of Non-Compliance: 2. Separation of the Chairman and CEO [Corporate Governance].
- Board Guide Appendix 2F: Board and Board Committees’ Composition Requirements [Board Composition].
- NC Guide 4.6: The Lead Independent Director [Director Independence].
- NC Guide Appendix 3C: Types of Directors [Nomination and Appointment Process].
- NC Guide Appendix 4D: Sample Terms of Reference for Lead Independent Director [Director Independence].
- NC Guide Appendix7B-1: Succession Plan for Board Chairman [Succession Planning].
E. Related Articles
- “Whither the lead independent director” by Adrian Chan. (57KB)
- “The Lead ID: How is he supposed to lead?” by Adrian Chan. (250KB)