Legal Definitions - outside director

An outside director is a member of a company's board of directors who is not an employee or major shareholder of the company. They are appointed or elected to provide an objective perspective and exercise control over the company's officers.

• An individual who is a professor at a university and is appointed to serve on the board of directors for a technology company as an outside director.
• A retired executive who is elected to serve on the board of directors for a healthcare company as an outside director.

These examples illustrate how outside directors bring diverse experiences and perspectives to a company's board of directors, which can help improve decision-making and prevent conflicts of interest.