To maximise the effectiveness of corporate governance, an audit committee should be structured so that it:
A) is chaired by the chair of the board.
B) consists of a majority of independent directors.
C) consists mainly of executive directors.
D) all of the above

Question

Quizplus · Accepted Answer

A majority of independent directors on the audit committee ensures that the committee can provide unbiased oversight of the company's financial reporting and internal controls. Allowing the chair of the board or mainly executive directors to lead the committee may compromise its independence and objectivity.

To Maximise the Effectiveness of Corporate Governance, an Audit Committee