ICAEW SE · Chapter 7 · Question 5 of 18
Why are independent non-executive directors considered important to good governance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) They can provide objective challenge to executive management and help protect the interests of shareholders and other stakeholders
Explanation
Independent non-executive directors are not involved in day-to-day management, which allows them to scrutinise and challenge executives objectively. They often sit on audit, remuneration and nomination committees. This supports ethical behaviour and reduces the risk of management acting in its own interests.
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