In response to the unethical practice of Independent Non-Executive Directors (INEDs) transmuting into Executive Directors within the same group or corporate structure, the Securities and Exchange Commission (SEC), on June 19, 2025, issued a circular expressly prohibiting the practice as part of its broader regulatory oversight.
In the circular, the SEC expressed concerns about the growing trend of converting INEDs into Executive Directors, including appointments to the role of Chief Executive Officer; a move it considers contrary to the spirit of good corporate governance.
This development is extensively examined in our latest article titled:
“Strengthening Corporate Governance Culture in Public Companies and SEC-Regulated Entities: SEC Circular on the Transmutation and Tenure of Independent Non-Executive Directors.”