A great director I served with: the world is not filled with Cliffs.

THE INDEPENDENCE of directors is usually measured by familiar criteria: not employed currently or in the recent past by the company; no conflicts of interest; not engaged in business or professional relations with the company ... and on and on. But, as has been often said, true "independence" lies not in mechanical prescriptions but in the "state of mind." Thus, even when all the tests are met, there is still the question of whether a relationship exists that in some subtle fashion compromises independence.

An example: The engagement partner of a company's auditor and the company's chief financial officer are yachters -- they had their boats in adjacent berths at a yacht dub, they partied at the club every Saturday night, often met for drinks and lunch or dinner during the week. All the articulated standards for auditor independence were met.

But, commendably, the company CEO put his nostrils in the air, sensed danger, and gave the auditor and the CFO three choices: a new engagement partner, a new CFO, or a sharp diminution of the social contacts. They chose the third option.

By all the common criteria of independence, Cliff was independent. He owned and ran his own business which had no dealings with the company on whose board he served. He had never been employed by the company. But ... he was the CEO's closest friend. Their social lives were intertwined. They were neighbors. He and the CEO had investments together. Cliff's intimate knowledge of the company's complex business indicated they often talked about it.

And Cliff was the chairman of the audit committee! Could he by any measure have the mind-set that truly is the crux of independence? Certainly anyone sensitive to such matters would answer in the negative.

But Cliff was perhaps the exception that proved the rule. He was the most independent of us all.

When the CEO -- a strong-willed and determined man -- decreed that every function at corporate headquarters would be cut by 10%, it was Cliff who stormed into the CEO's office and told him that there would be no cuts in the internal audit personal -- and there weren't any.

When that moment every director hopes will never come did indeed come to the company -- the reluctant conclusion of the board that the CEO could no longer effectively lead the company -- Cliff agreed and, in fact, delivered the board's message.

Is there a moral to this story? Simply rely on the mechanical rules and everything will come up roses? Conclude that the kind of relationships Cliff had with the CEO do not impair independence and you can count on the innate integrity of people to overcome any bias that might stem from those relationships? Or conclude that the world is not filled with Cliffs and rely on one's instinct that such relationships are likely to impair independence?

The world is not filled with Cliffs. If it were, there would be nothing noteworthy in these reflections and no need for concern with independence. That would be Candide's "best of all possible worlds." The "moral" is Hobbesian (and perhaps reflective of the author's cynicism): Close personal relations can be a danger to independence and one should not expect to encounter many Cliffs in today's business world. So the wisest course is to avoid labeling someone with the relationships Cliff had with the CEO as independent and putting him or her in a spot where independence is essential -- for instance, on the audit committee.

But Cliff nonetheless deserves my nomination as the most memorable director I've known -- because he acted contrary to all our expectations. Increasingly, happily, more and more directors fulfill our expectations -- not all, not enough, but many. Hail to one who went far beyond them!

Al Sommer's "great director" nomination, which concludes our series, is a real-life colleague who is being profiled with the pseudonym Cliff. Al himself has been an anything-but-anonymous presence in the governance arena. A former commissioner of the Securities & Exchange Commission, he is Of Counsel with Morgan, Lewis & Bockius LLP, in the Washington, D.C. office. He is a corporate director, has been chairman of the National Association of Corporate Directors, and is an expert authority and commanding writer and speaker on governance, accounting, and other corporate matters.