The Securities and Exchange Commission (SEC) has barred independent non-executive directors from taking up executive roles within the same company or group structure, including that of chief executive officer.
In a circular dated 20 June 2025, the commission informed all public companies and capital market operators of its position on the ‘Transmutation of Independent Non-Executive Directors and Tenure of Directors’.
Independent non-executive directors are meant to act like watchdogs: they monitor the company’s management from the outside and aren’t involved in running the business day-to-day. Their job is to ask tough questions and make sure the company is being run properly.
