Question

Frank is a board member at Lofloy Greens Inc.,a publicly traded company.In addition to his duties on the board,Frank is also a full-time employee as a senior manager at Spinson Locomotives Inc.Which of the following is most likely to be true of Frank?
A) Frank is a part-time employee at Lofloy Greens.
B) Frank cannot serve as a director on Spinson Locomotives' board.
C) Frank is an outside director on Lofloy's board of directors.
D) Frank is a stockholder of Lofloy Greens.

Answer 1

Answer: C) Frank is an outside director on Lofloy's board of directors.

Explanation:

As Frank has a full time employment position as a senior manager at Spinson Locomotives, he is most likely an outside director on Lofloy's board of directors.

Outside directors are those members of the board in a company that are not employed by the company which Frank isn't.

Outside directors like Frank are thought to be more impartial in decision making and for this reason companies are usually required to have a certain number of them sitting on the board.