ITPEC IP October 2022 Question 75
ITPEC IP October 2022 — Question 75 of 100
Appointing outside directors strengthens independent monitoring of management decisions. Directors who are not involved in daily execution can offer external expertise, question management objectively, protect stakeholder interests, and supervise the board with fewer internal conflicts of interest.
Answer (c)
Why not others:
- surveillance of entry and exit does not examine management decisions
- private investigation of personal conduct is not a normal governance mechanism
- hiring law graduates may add expertise but does not by itself give the board independent oversight
Key rule: Corporate governance is strengthened when independent outside directors monitor and supervise executive management.
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