An independent outside director:
A) is defined as a company employee who has no management responsibilities outside of the board.
B) cannot serve as the board chairman.
C) is prohibited from owning shares of the firm.
D) can be a shareholder as long as he/she holds no management position in the firm outside of the board.

Question

Quizplus · Accepted Answer

An independent outside director can be a shareholder as long as he/she holds no management position in the firm outside of the board. They are defined as a director who has no management responsibilities outside of the board and can serve as the board chairman, but they must not have any conflicts of interest that may compromise their ability to act in the best interests of the company and its shareholders. Therefore, choice D is the best answer.

An Independent Outside Director