Reed Hastings, CEO of Netflix (Nasdaq: NFLX), said he’ll retire as a director of Microsoft (Nasdaq: MSFT), the world's biggest software company, at its Nov. 28 annual meeting. He’s served as a director since 2006.

More important, Hastings, 51, has been the lead independent director for the Redmond, Wash.-based company since 2010. Under recent reforms, the lead independent director is not a company executive whose role is to oversee board matters.

Hastings is also a director of Facebook (Nasdaq: FB), the No. 1 social networking site. He owns a million shares of Facebook.

Netflix's Chief Executive Officer Reed Hastings
Netflix reported lower earnings for the fourth quarter of 2011 compared to 2010, but the earnings still beat analyst estimates. Its shares are up 77 percent since the beginning of the year. Photo: Reuters

Hastings owns 226,000 shares of Microsoft, valued now around $6.7 million, and received cash and stock awards valued at $265,000 in the fiscal year ended June 30. Microsoft’s proxy said he will convert that into 9,057 shares.

Netflix, of Los Gatos, Calif., has seen its own fortunes decline over the past year. Its shares have fallen 41 percent, lowering its market value to only $3.67 billion. Hastings said he wants to pay more attention to Netflix business.

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“Reed has been a terrific board member,” said Microsoft CEO Steve Ballmer. Netflix and Microsoft will also continue their partnership: Microsoft Xbox units were the first Internet devices that could be connected to Netflix’s libraries of movies and TV shows.

Microsoft shares fell a dime to $29.18 in midday trading. Netflix shares rose 34 cents to $65.87.