The need for clarification on the board requirements for a majority of independent directors in relation to corporate governance is of great importance and would be discussed in this article. According to Shleifer and Vishny (1997), corporate governance is the system by which companies are directed and controlled. On the other hand, an independent director is a person who has never worked for the company or owned shares in the company. Furthermore, this director would not be related to any of the key employees nor would he work for any major supplier, client or service provider, such as consultants, accountants, lawyers, etc. In principle, as retrieved from Wikipedia, "an independent director is a director of a board of directors, who would have no material or pecuniary relationship with the company or related persons, except for sitting compensation". It is the duty of the It is also the independent director's duty to ensure that the board is active, effective and functioning well. .The importance of the roles of independent directors cannot be emphasized enough and the important role is to improve the performance of the board and the company as a whole. Such roles, however, are constrained by various factors, the two most important, i.e. the information available to the independent directors, and the position/size of the company influenced by the transitions/life cycle of the company and any significant changes the company may experience. Having mentioned the need for an independent director, specific board positions should be filled by independent directors (e.g. Chair...... middle of paper ......ive Australian small business regulatory system: governance for small businesses Melbourne, Victoria Law School. ISBN 978-1-86272-692-5Australian Corporations and Securities Legislation (2011) ASIC Act 2001. Sydney, CCH.Banks G. (2006). to follow. Inaugural Public Lecture, Monash Center for Regulatory Studies Melbourne, 17 May. Retrieved from: http://www.eiilmuniversity.ac.in/coursepack/Commerce/CORPORATE_GOVERNANCE.pdf Nicholson, GJ and Kiel, GC 2007, 'The can directors impact performance? A case-based test of the three theories of corporate governance", Corporate Governance: An internationalOverview of the Regulatory and Corporate Governance Framework, http://www.pc.gov.au/__data/ asset/pdf_file /0007/93598/08-capitolo5.pdf