Leader: The spirit of independence

Investor relations finds itself in the middle of a three-way tug-of-war between shareholders, management and the board of directors. Each party is meant to keep the other two in check, while the IRO acts as messenger to them all. Who is saying what about whom? It’s the IRO’s job to find out.

Everyone can see the benefit of boards that are independent – they provide a system of checks and balances to offset corporate cronyism. ‘Let an independent, equity-holding board decide what’s best for the company,’ exclaim fans of independence, ‘as opposed to the threat of litigation to keep management in check.’ In other words, let good corporate governance provide inoculation against bad decision-making. Corporate democracy – it’s a noble idea.

But has our preoccupation with technicalities caused us to forsake the spirit of independence? While independence is an easy term to roll off the tongue, the devil is in the detail. Consider the case of Atlanta-based Fuqua Industries, which created a supposedly independent one-man special committee comprised of Duke University then-president Terry Sanford. Shareholders charged – and courts agreed – that Sanford was not truly independent because although he satisfied all the textbook criteria of independence, Fuqua had given generously to Duke U, and Fuqua’s chairman and CEO JB Fuqua was on the university’s board of trustees (which, incidentally, has the responsibility to hire and fire university presidents).

Dissident shareholders maintain that boards should be seated not only with a majority of independents, but a significant majority. That structure, they argue, is necessary to strengthen the board’s hand against the persuasive, self-serving hand of top management.

Of course independence is highly desirable, but we should also be alive to the idea that very good performance-oriented counselors are more valuable board members than mere textbook independents. Good non-executive directors remain very difficult to find, and a visionary chairman would be foolish to turn them away simply because they have some distant relationship to the company. Boards too can succumb to the lemming mentality, after all, regardless of whether they are truly objective or not.

The theme here is that the spirit of good corporate governance lies in its focus on performance just as much as on a preoccupation with strict, technical compliance. We have to move beyond box-ticking. And it’s the investor relations department that has to try to explain this to the shareholders.

Upcoming events

  • Forum – AI & Technology Europe
    Thursday, March 12, 2026

    Forum – AI & Technology Europe

    About the event Stay ahead. Harness AI. Transform IR. In today’s rapidly evolving financial landscape, AI is transforming how IROs engage with investors, analyze market sentiment and deliver insights. Yet, many IR teams face challenges in understanding and employing these tools effectively. WHEN WHERE America Square Conference Centre, London The…

    London, UK
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    Tuesday, March 17, 2026

    Briefing – The story behind the story: how IR teams prepare for volatile periods

    In partnership with WHEN 8.00 am PT / 11.00 am ET / 3.00 pm GMT / 4.00 pm CET DURATION 45 minutes About the event After a tumultuous 12 months in the markets, 2026 appears poised to be dominated by the same macroeconomic factors that defined 2025. The ongoing impacts…

    Online
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    Thursday, March 19, 2026

    Think Tank – West Coast

    Our unique format – Exclusively for in-house IRO’s The IR Impact Think Tank – West Coast will take place on Thursday, March 19, 2026 in Palo Alto and is an  invitation-only event exclusively for senior IR officers. Our think tanks are free to attend and our unique format enables participants to network extensively, and discuss, debate and dissect…

    Palo Alto, US

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