Reading board independence language without getting lost
Annual reports use similar words for independence; the footnotes often diverge. A reading pattern for governance rows in ESG comparisons.
Board independence is a favourite ESG factor because it sounds measurable. Then you open three annual reports and find three ways of counting.
Collect the definition each issuer uses
Some issuers cite exchange criteria only. Others add tenure caps, former executive cool-off periods, or material business relationships. Copy the issuer’s own definition into your working notes before you mark a director independent or not.
Watch tenure exceptions
A director labelled independent for fifteen years may still meet local rules while peers disclose a stricter internal limit. Your comparison should show the rule each board applies, not only the adjective in the director table.
Committee attendance is a separate factor
Do not fold attendance into independence. A director can be independent on paper and rarely present. Keep attendance as its own row if the mandate cares about engagement quality.
Related-party footnotes matter
Independence narratives weaken when related-party sections show ongoing commercial ties. Cross-check the related-party note even when the director table looks clean.
Write the gap, not a verdict
Your job in a comparison memo is to show where definitions and disclosures diverge. Leave the vote recommendation to the stewardship team that owns the mandate.