A listed company’s board has nine directors, six of whom are not employees. Two of the six are the CEO’s brother and the company’s long-time banker. Is the board majority-independent?

Answer

No — only four of nine are independent; outside is not independent

Options - A. No — only four of nine are independent; outside is not independent - B. Yes — six of nine are outside directors, which is a majority - C. Yes — the banker is independent because he is not a family member of any executive - D. No — a board needs at least two-thirds independent directors Why - A. Correct — the brother (immediate family of an executive officer) and the banker (material business relationship) are outside but not independent, leaving four of nine. - B. Outside describes employment only; the rubric counts independent directors. - C. Family is one deemed relationship; a material business relationship is another route to non-independence. - D. NP 58-201 s. 3.1 recommends a majority, not two-thirds; the board fails at four of nine regardless.

Synthesis of NP 58-201 ss. 3.1–3.3, 3.18; NI 52-110 ss. 1.4, 3.1