What is difference between Non-executive and Independent director?

Answer 1

A non-executive director (NED, also NXD) or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way. They are differentiated from inside directors, who are members of the board also serving as executive managers of the company (most often as corporate officers).

Non-executive directors have responsibilities in the following areas, according to the 2003 report by Derek Higgs commissioned by the British Government:[1][2]

* Strategy: Non-executive directors should constructively challenge and contribute to the development of strategy.

* Performance: Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitoring, and where necessary removing, senior management and in succession planning.

NED's should also provide independent views on:

* Resources
* Appointments
* Standards of conduct

Non-executive directors are the custodians of the governance process. They are not involved in the day-to-day running of business but monitor the executive activity and contribute to the development of strategy.


Independent directors are directors who apart from receiving director’s remuneration do not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in the judgement of the board may affect their independence of judgement.

Powers

* Equal Member of Board
o Power to demand information
o Power to exercise her vote
o Power to govern

Hope this info helps..
Good luck..!!!!!!!!!!!!

Answer 2

A non-executive director is one who does not hold, or who no longer holds, executive duties. However he may not be independent. As an e.g. a former CEO who has been succeeded as a CEO by a new one, may stay on as a Board member, but he is not independent.

Within the meaning of Rule 4200 of The NASDAQ Stock Market, "Independent director" means a person other than an executive officer or employee of the company or
any other individual having a relationship which, in the opinion of the issuer's board of directors, would interfere with the exercise of independent judgement in carrying out the responsibilities of a director. The following persons shall NOT be considered independent:
(A) a director who is, or at any time during the past three years was, employed by the company or by any parent or subsidiary of the company;
(B) a director who accepted or who has a Family Member who accepted any compensation from the company in excess of $100,000 during any period of twelve consecutive months within the three years preceding the determination of independence, etc

Pls click on the link for a full definition of "independent director" and who is not an independent director.

Answer 3

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What is difference between Non-executive and Independent director?

Answer 4

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There is a difference. A non-executive director is a director who does not work, nor have they ever worked for the company in any executive or significant management position, i.e. an "outsider". There are many criteria used to determine if such a director is also an independent director. Some consider a director to be independent if, among other things: - they are not a substantial shareholder of the company -they are not executives of a company upon which executives of the company on whose board they sit are directors of that company (i.e. Director A of Company 1 is president of Company 2 and no executives of Company 1 sit on Company 2's board of directors, aka cross-directorship) -they are not a material supplier or customer of the company, or an officer of a company that is a material supplier or customer (some corporate governance policies extend this to creditors (i.e. their bankers) as well..IMO: as they should!) -they do not have any material contractual (or business) relationship with the company, its executives, management team, auditors or other directors -they are free from any business or personal relationship which could, or could reasonably be perceived to, interfere with their ability to carry out their duty to act in the best interest of the company -their immediate family members do not have material ownership or business interests in/with the company or its management team...the same applies to personal relationships (i.e. the father of the CEO's spouse would not be considered independent - simply because of the appearance of a possible conflict of interest) ...I think you get the idea...