The SEC requires that nominating and compensation committees are staffed entirely by outside directors.

Question

Quizplus · Accepted Answer

The SEC requires that the nominating and compensation committees of publicly traded companies be composed entirely of independent directors, who are identified as those who have no material relationship with the company or its management. These independent directors are considered to be "outside" directors because they are not employees of the company. This requirement is intended to ensure that these committees act in the best interests of the shareholders and that their decisions are not influenced by management's interests.

The SEC Requires That Nominating and Compensation Committees Are Staffed