In recent years, institutional investors in U.S. firms have demanded that boards of directors include more independent outsiders than inside officers. Why do these investors prefer independent outsiders on boards of directors?

Question

Quizplus · Accepted Answer

Independent outsiders are more objective and less likely to be influenced by the CEO or inside officers who may have personal interests that conflict with the interests of the company and its shareholders. This helps to ensure that the board of directors is able to effectively monitor and oversee the management team and make decisions in the best interests of the company and its shareholders.

In Recent Years, Institutional Investors in U