Corporate Governance - Proposed Directors' Roll

RE: Key changes on corporate governance guidelines

Akin to the curious phenomenon of how firms pay for audit companies for their services directly, I do not understand why independent directors are appointed and paid for by the firms directly. How is that 'independent'?

Under such an arrangement, it's perfunctory to tweak the % of independent directors in the board.

If we are serious about corporate governance, the State ought to ensure that independent directors are in fact independent.

To start, the State could select and maintain a 'Directors' Roll', by:

1. Working out a list of eligibility criteria for independent board directors
2. Inviting eligible individuals to be on the Directors' Roll
3. Assigning these individuals to all firms' board as 'independent directors'.

In terms of eligibility criteria, the State issues some sort of a 'licence' for independent directorship of firms of various sizes. This means, depending on fulfillment of the eligibility criteria, one could hold all licence types, or just one. Each licence type is further 'graded' to reflect an individual's experience.

The firm pays this State entity a fee based on the size of the company, size of board etc. The directors are in turned paid by the State Directors' fees which are based on licence types and grades.

Firms can choose to fill up their boards based on licence grades to suit their corporate plan and budget, but are not allowed to choose the individuals being assigned to their boards. This is also means that females and minorities are more likely to get onto boards (provided that this State entity is blind to such differences).

Each director's term is for say, 3 years, and the number of directorships that each individual takes up is tracked and transparent. There should a universal cap on the number of directorships an individual can hold simultaneously.

All individuals on the Directors' Roll are required to complete introduction training and periodic refresher courses to maintain their licence and/or grade.

Of course, the above policy ought to be drafted with public consultation at various stages of its making.

We can do this coz we are small, and we should leverage on such unique attributes which large economies are unable to. Can't always be copying.

So now, which AO knows how to go about doing this?
From inception to execution?