Question

Which one of the following statements is TRUE? a. Company sponsorship of a local charity is an example of a nonpecuniary benefit.b. Since outside directors have no other connection with the firm, they are indebted to the CEO for putting them on the board.c. An inside director is a board member who also holds a managerial position in the company. d. In a classified board, it is easier for dissidents to gain representation since fewer seats are up for election each year.

Answer 1

Answer: c. An inside director is a board member who also holds a managerial position in the company

Explanation:

Inside Directors are indeed Board members who are employees/ hold managerial positions in the company.

They are in a unique position to help the board in Corporate Governance because as they are on the ground, they have specialized knowledge of the company and as such can provide complete information to the Board.

They typically include a Company's top executives such as the CEO, CFO and the COO.