The concepts of conflict of interest and director independence are distinct and the distinction is one with a different, but all too often, the concepts are confused, misstated, misapplied, or misunderstood. Yet, the concept of director independence as a standalone element of effective corporate governance is too important to give up on or to punt.

In this article, Michael W. Peregrine and Ralph E. Dejong, build the case for a “declaration of director independence” from the ground up. They describe the concepts, requirements, and definitions around director independence and how they relate and differ from conflict-of-interest issues.