{
  "id": 9443148,
  "title": "The dependent independent director",
  "url": "https://urgent.news/2026/09/24/the-dependent-independent-director",
  "topic": "business",
  "section": "Business",
  "published": "2026-09-24T00:00:41.000Z",
  "source": {
    "name": "New Straits Times",
    "slug": "new-straits-times",
    "url": "https://www.nst.com.my/business/insight/2026/09/1539761/dependent-independent-director"
  },
  "original_language": "en",
  "account": "Independent directors are expected to provide objective and impartial judgment to the board, challenging management and protecting shareholders' interests. However, formal independence does not always translate into practical independence. Long tenure and familiarity can lead to a psychological dependency on the company, its management, or controlling shareholders. Directors may become reluctant to challenge those they have known for many years and may trust their relationships more than their professional scepticism. Dependence on board fees can also create a psychological dependency, especially when directors rely on board appointments as a significant source of income. When a controlling shareholder appoints independent directors, the directors may feel obligated to the shareholder, creating a subtle conflict between their legal duties and personal loyalty. Social and personal relationships can also compromise independence, as directors who socialize with management may find it difficult to challenge their decisions objectively. Information asymmetry, where management controls much of the information presented to the board, can also lead to dependency, as directors may rely on management's interpretation of events. A powerful chairman or dominant CEO can create a culture that discourages dissent, causing directors to avoid challenging management and fostering groupthink. The fundamental reason for dependency is that independence is a behavioral quality, not just a structural condition. Conflicts of interest, confirmation bias, familiarity bias, reciprocity, and the desire to maintain board cohesion can all contribute to dependency. When independent directors become dependent, the board's ability to provide effective oversight declines, potentially allowing poor management decisions, related-party transactions, and financial reporting issues to go unchecked. To strengthen independence, companies should assess directors' independent judgment, monitor tenure, consider the lack of influence from relationships, and encourage directors to ask difficult questions without fear of repercussions.",
  "summary": "KUALA LUMPUR: Independent directors are expected to provide objective, impartial and independent judgement to the board.",
  "key_points": [
    "Formal independence does not guarantee practical independence for independent directors.",
    "Psychological dependency can develop due to long tenure, familiarity, and board fees."
  ],
  "editors_take": "The phenomenon of dependent independent directors means that even formally independent board members may prioritize personal relationships and loyalty over objective judgment, ultimately compromising effective oversight of management.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}