Which of the following statements regarding outside members of boards of directors is accurate?
A) Outside directors, as compared to insiders, tend to focus less on monitoring a firm's economic performance than on other measures of firm performance and are more likely than insider members to dismiss CEOs following poor performance.
B) Outside directors, as compared to insiders, tend to focus less on monitoring a firm's economic performance than on other measures of firm performance and are less likely than insider members to dismiss CEOs following poor performance.
C) Outside directors, as compared to insiders, tend to focus more on monitoring a firm's economic performance than on other measures of firm performance and are less likely than insider members to dismiss CEOs following poor performance.
D) Outside directors, as compared to insiders, tend to focus more on monitoring a firm's economic performance than on other measures of firm performance and are more likely than insider members to dismiss CEOs following poor performance.

Question

Quizplus · Accepted Answer

Outside directors have a more external focus and are likely to place more emphasis on monitoring a firm's economic performance. They are also more likely to dismiss a CEO following poor performance since they may not have close ties to the CEO or other insiders within the company.

Which of the Following Statements Regarding Outside Members of Boards