Director independence and non-interlocking directorships are desirable traits of top-ranked boards.What does this mean?

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Quizplus · Accepted Answer

Another key component of top-ranked boards is director independence. Governance experts believe that a majority of directors should be free of all ties to either the CEO or the company. This means that a minimum of insiders (past or present members of the management team) should serve on the board and that directors and their firms should be barred from doing consulting, legal, or other work for the company. Interlocking directorships in which CEOs and other top managers serve on the board of each other are not desirable.

Director Independence and Non-Interlocking Directorships Are Desirable Traits of Top-Ranked