Independent directors, conflict of interests and evolution

On April 6, 2026, the Fast-Forward 2026 conference dedicated to the future of business leadership, took place in Yerevan. The event was jointly organized by the Banks.am portal of Mediamax Media Company and Boyden Armenia.

The primary aim of Fast-Forward is to create a platform and a conducive environment where business representatives can freely discuss sensitive issues related to leadership, management, and development. 

The conference partners included Wilco Wealth Management, SIL Insurance, Alfa-Pharm and the European Campus of the University of York. 

“Independent Directors: Real Benefit or Tribute to Fashion?” – this was the title of the first panel discussion at the Fast-Forward 2026 conference, moderated by Sevada Baghdyan, Partner and Head of the Armenian and Georgian Offices at Boyden.

Independent Directors make up over 50% of Ameriabank’s Board

Tigran Davtyan, Independent Director of Ameriabank

Until recently, boards in companies were often seen as a “tribute to fashion.” However, transformations in Armenia’s banking system have shown that the involvement of independent directors is not a mere formality, but a vital element of effective governance.

Independent directors frequently prove more effective than shareholder representatives. While shareholders often appoint board members based on personal trust, this does not always align with professional expertise.

International best practices in corporate governance recommend that at least 50% of a company’s management body be composed of independent directors. These professionals bring diverse experience and can significantly contribute to the company’s development.

In Armenia, the banking sector is increasingly adopting this approach. For example, independent directors at Ameriabank now account for more than 50% of the board.

It is also important that these directors have experience across different fields, which fosters more balanced and higher-quality decision-making.

“Real board can be formed only when the shareholder realizes that the company is an institution, not a reflection of his own ‘self’” 

Elena Khachvankyan, Independent Member of the Board of Directors at IDBank

To move from a formal board to a real, working one, it is essential first to understand what independence means. I see independence as the very ‘air’ of conflict-of-interest management, without which, effective governance is impossible.

It is natural for large shareholders to want their representatives on the board. However, this can risk turning the board into a purely formal body – a unit that simply endorses decisions already made. An independent board member must first and foremost bring professionalism. Being selected and invited to the board means that the individual can contribute genuine value.

Independence also implies autonomy from the CEO, the company, and the shareholders. An independent director relies on their own knowledge and experience, forms their own judgments, and has the courage to raise issues that others may avoid. This contributes to more balanced and well-considered decision-making.

In such cases, the board can effectively balance compliance, risk management, and strategic development. While shareholders naturally have a vision for the company’s growth, they may not always fully perceive the risks or opportunities in certain areas. A professional board, equipped with the relevant expertise, can enrich and strengthen that strategy.


In recent years, Armenia has seen significant progress in corporate governance. The Corporate Governance Code has been adopted at the legislative level, and the Central Bank has introduced policies encouraging the formation of more effective boards. At the same time, there is a noticeable shift in shareholders’ mindsets.

Today, Armenia is transitioning from regulation to actual implementation. When shareholders recognize that their company should function as an institution – not merely as a reflection of themselves – truly effective boards will emerge.”

“It’s hard to find a better word to describe a board than ‘advisory body’” 

Armine Melkonyan, Executive Director of SIL Insurance Company, Member of the Board of SIL Capital Company

“I must emphasize the pivotal role of the Central Bank in establishing a three-tier management hierarchy within financial organizations.

At the start of the discussion, Sevada Baghdyan presented statistics showing that, among Armenia’s 200 largest taxpayer companies, this three-tier hierarchy is often absent: many shareholders still retain the position of executive director. 

The importance of an independent board is even greater in companies where the ultimate beneficiary is not a single shareholder but several, between whom conflicts of interest may arise. 

Looking at international experience, it is clear that in organizations with several shareholders, the absence of an independent board has often led to interruptions in business operations. An independent board functions as a balancing mechanism and becomes a critical tool for sustaining long-term business during sharp conflicts of interest.

In fact, it is difficult to find a better word to describe a board than ‘advisory body.’ It is a collegial body, where no single member can act independently of the others.

It is also crucial to ensure gender diversity on boards. In recent years, business management has shifted toward a more people-centered model. The presence of emotional intelligence and empathy – qualities often more expressed in women – is increasingly important in effective board decision-making.

“I believe in evolution”

Mikayel Matsakyan, General Director of Alfa-Pharm Company

My colleagues mentioned that shareholders often do not relinquish the position of CEO. In our pharmaceutical industry, this is even more pronounced: shareholders often hold not just the CEO role, but almost all key positions.

We also need to consider the objective reality: many businesses were founded in the 1990s, when roles were not clearly defined. A founder could simultaneously act as worker, negotiator, commercial director, and call taker. In this sense, I believe in evolution – it takes time for transformation processes to succeed.

Our board of directors was established in 2008, when the European Bank for Reconstruction and Development (EBRD) became a shareholder of Alfa-Pharm. One of the mandatory conditions was the introduction of a corporate governance system. At that time, most shareholders’ mindset was, ‘We need funding, and if creating a board is necessary to get it, we will create one.’ 

Today, the situation is very different. Board discussions are now focused on the company’s future and strategic development. Shareholders have begun to understand and appreciate the value of this approach. 

There is also a cultural aspect: Armenians tend to avoid debate, often interpreting opposing opinions as personal criticism rather than alternative perspectives. At Alfa-Pharm, we have managed to create a board environment where healthy debate thrives and it is from these discussions that valuable ideas for the company emerge. 

Read also: Fast-Forward 2026: A new environment for discussing sensitive business issues

Yana Shakhramanyan

Photos by David Ghahramanyan