The importance of independence - not least for a financial centre

IN almost all areas of financial services, independence is vital. External auditors have to be independent of their clients if they are to pass judgement on whether the accounts are true and fair, whilst internal auditors have to be independent of their colleagues if the reports they generate can help management make better decisions.

In stockbroking, research reports and investment recommendations are issued on the understanding that their contents are prepared objectively, untainted by any undue influence from the corporate sector, financial pressures or the subjects of the recommendations. Broking firms are therefore expected to erect strict "Chinese walls'' between research units and other departments within their organisations to eliminate conflicts of interest and unfair influence in the preparation of "buy'' and "sell'' reports.

Journalists, meanwhile, are expected to report the news in an unbiased fashion whilst regulators are expected to conduct their duties independently, without being swayed by commercial considerations.