Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. What circumstances would most likely have initiated this proposal?

Question

Quizplus · Accepted Answer

The need for a lead director is typically initiated when there are concerns about the independence and effectiveness of the board, particularly in situations where the CEO/Chairperson of the board has been suspected of opportunistic behavior. In such cases, the lead director serves as a counterbalance to the CEO/Chairperson, providing an additional layer of oversight and accountability. The other options (A, B, and D) do not directly relate to the need for a lead director.

Several Members of the Board of Directors of American Textile