A company's board of directors plays an independent and fiduciary role in corporate governance and the strategy-making, strategy-executing process. True or false? Please explain.

Question

Quizplus · Accepted Answer

Every corporation should have a strong independent board of directors that (1)is well informed about the company's performance, (2)guides and judges the CEO and other top executives, (3)has the courage to curb management actions the board believes are inappropriate or unduly risky, (4)certifies to shareholders that the CEO is doing what the board expects, (5)provides insight and advice to management, and (6)is intensely involved in debating the pros and cons of key decisions and actions. Boards of directors that lack the backbone to challenge a strong-willed or "imperial" CEO or that rubber-stamp almost anything the CEO recommends without probing inquiry and debate abdicate their fiduciary duty to represent and protect shareholder interests.

A Company's Board of Directors Plays an Independent and Fiduciary