We have noted before on this Blog that the definition of independent director used by the NYSE does not in fact ensure that directors are independent (the definition doesn't take friendship into account). The definition also disqualifies from independent any director with a material financial relationship. Yet the exchanges apparently do not enforced this standard with respect to director fees, despite their often prodigious amount of the payments.
Given these limitations, the argument can be made that the reference to "independent director" under the rules of the stock exchanges is misleading. Most ordinary investors would likely believe that independent boards contain a majority of directors without significant ties to the company or the CEO. In fact, this is not the case. The problems with the definition and enforcement came to the fore in the recent decision by Black & Decker and Stanley Works to merge.