Which feature most clearly indicates that a director is independent?
Correct answer: C. The director has no material relationship affecting judgment
- A. The director holds a large controlling shareholding
- B. The director is a full-time executive of the company
- C. The director has no material relationship affecting judgment
- D. The director has served as the company's chief accountant
Explanation
An independent director should be free from relationships that could improperly influence judgment. Share ownership, executive employment, or close financial ties may weaken independence.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Ethics and Corporate Governance
Business ethics applies principles such as honesty, fairness, responsibility and transparency to decisions involving employees, customers, investors, competitors and society. Corporate governance covers the board of directors, accountability, disclosure, internal controls, stakeholder interests, agency conflicts, corporate social responsibility, codes of conduct and whistleblowing.
Practise Business Ethics and Corporate Governance
30 free Business Ethics and Corporate Governance MCQs from Introduction to Business, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Introduction to Business questions like this
Introduction to Business is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
More Business Ethics and Corporate Governance questions
What is the primary fiduciary responsibility of a company's board of directors?
In corporate governance, the agency problem mainly arises because:
Which statement best distinguishes business ethics from business law?
What is the main purpose of an audit committee in corporate governance?
Which action is the clearest example of whistleblowing?
According to stakeholder theory, a company should consider the interests of: