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Reyes Calderón Cuadrado, Writer and Professor of Economics School


Sun, 24 Apr 2016 12:57:00 +0000 Published in La Razón

Independence is the darling of corporate governance. Academics, investors and regulators sing the praises of a committee board of directors with a higher proportion of independent directors. Independence minimizes conflicts between executives and shareholders, controls the transparency and accuracy of financial information, adds confidence to investors...

This is despite the fact that empirical analyses do not show that greater independence means better corporate results. But what does independence mean? Regulators define the elusive term by status: independent is non-executive, non-executive, non-employee, non-interested...

Once this barrier to entry has been verified, the value is taken for granted. I believe that although necessary, it is not enough. I believe that independent is a person capable of making prudent decisions in complex situations, looking out for the good of the company and its shareholders, without being influenced by other directors, other social or political powers, or other significant shareholders. And why would you maintain your independence by resisting all these pressures? For one reason only: your reputation is your main asset. Without it, he would be a non-executive wannabe. And reputation is gained in years and lost in five minutes. Five minutes of non-independence.