Which one of the following corporate board characteristics usually improves corporate governance? a. Board members are paid at a rate higher than their peers and their payment is mostly cash. b. CEO is not the chairman of the board. c. The board has a majority of insiders from company management on it who bring first-hand knowledge of how the company operates. d. The board has many outsiders who have lots of other important commitments. e. The board is as large as is possible.

Question

Gloria Turner

Business

25 April, 15:32

Which one of the following corporate board characteristics usually improves corporate governance? a. Board members are paid at a rate higher than their peers and their payment is mostly cash. b. CEO is not the chairman of the board. c. The board has a majority of insiders from company management on it who bring first-hand knowledge of how the company operates. d. The board has many outsiders who have lots of other important commitments. e. The board is as large as is possible.

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Saul · Answer 1

c. The board has a majority of insiders from company management on it who bring first-hand knowledge of how the company operates.

Explanation:

When the board members consist to a large extent members who are insiders of the company, their ability to govern the company is improved.

This is evident from the fact that this members bring first-hand knowledge of how the company operates to the board. However, if majority of the board are outsiders they may not fully be aware of company operations.