The SEC requires that the audit,nominating,and compensation committees be staffed entirely by outside directors.

Question

Quizplus · Accepted Answer

This statement is true. The SEC mandates that the audit, nominating, and compensation committees of public companies must consist entirely of independent directors (i.e., directors who do not have an affiliation with the company other than serving on its board). The purpose of this requirement is to ensure that these committees are able to make objective decisions in the best interests of shareholders, without any undue influence from the company's management.

The SEC Requires That the Audit,nominating,and Compensation Committees Be Staffed