- 10 Marks
SCS – Nov 2021 – L3 – Q4 – Professional Practice and Codes of Ethics
Present factors that assess the independence of independent non-executive directors according to the Code of Best Practices.
Question
The board of COM currently consists of one executive director, the CEO, six non-independent non-executive directors (NEDs), and three independent NEDs. The chairman of the board has indicated that since the company is now listed, it is prudent to increase the number of independent NEDs. This, in the view of the board chairman, will ensure a ‘balance of power’ on the board so that no individual or small group of individuals can dominate decision-making by the board.
Required:
The Board chairman has approached you, a corporate governance expert and consultant, to make a presentation to the board on the factors that would be considered in selecting independent NEDs as provided in the Code of Best Practices on Corporate Governance. Limit the factors to FOUR (4).
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