Which one of the following statements is TRUE?

Question

Quizplus · Accepted Answer

An outside director is a board member who does not have any other affiliation with the company, which makes them independent and potentially more objective in decision-making. Option B is incorrect because a classified board is one in which only a portion of the directors are elected each year, not one in which an announcement is made for board member applications. Option C is incorrect because it is harder for dissidents to gain representation in a classified board since only a portion of the board is up for election each year. Option D is incorrect since all directors, whether inside or outside, have a fiduciary duty to act in the best interests of shareholders. Option E is incorrect because outside directors are not indebted to the CEO for their appointment, but rather to the shareholders who elected them.

Which One of the Following Statements Is TRUE