Chapter 3: Directors

Question 1

Types of Directors :

Answer 1

• Executive directors
• Non-executive directors (independent and Non-independent)

Question 2

what is a Proprietary Directors ?

Answer 2

is a member of the Board of Directors because he/she is a
shareholder of the company, or because he/she holds a stake of more
than 5% of the capital

Question 3

Nominee Directors definition ?

Answer 3

represent the interests of shareholders or stakeholder
groups (nominators) on a company’s board.

Question 4

Directors’ required skills

Answer 4

• Financial
• Strategy
• Relational
• Role
• Cultural

Question 5

Two particularly important contributions of NED

Answer 5

• reviewing the performance of the board and of the executive.
• taking the lead where potential conflicts of interest arise

Question 6

Skills of the Non-Executive Director

Answer 6

• Strategy
  -Performance
• Risk
• People

Question 7

Characteristics of the Non-Executive Director (NED

Answer 7

• not supposed to be influenced
• have some expertise
• bring special institutional relationships

Question 8

When a NED is effective ?

Answer 8

• highest ethical standards
• supports executives
• The effective Non-Executive Director (NED)
• Questions intelligently, debates constructively, challenges rigorously and decides
  dispassionately.
• Listens sensitively
• Gains the trust and respect of other board members.
• Promotes the highest standards of corporate governance and seeks compliance
  with the provisions of the Code* wherever possible

Question 9

When a Non-executive director is NOT effective ?

Answer 9

• Poor attitude, arrogant
• Lack of knowledge, commitment and preparedness

Question 10

In how many boards should be a Non-Executive Director (NED)?

Answer 10

Two to three directorships would seem a sensible level of commitment

• be difficult for them to manage more than six NED roles effectively

Question 11

What is the 2 approaches to independence ?

Answer 11

• Contextual
• Status-based

Question 12

what is the Status-Based Approach ?

Answer 12

The independent director as an “outsider,” “non-executive,” “non
employee,” or “disinterested” board member

negative
perspective and especially for its static and a priori assessment

Question 13

The contextual Approach to Independence

Answer 13

the analysis of each conflict of interest, observing a
combination of factors

Question 14

what is the positive approach to Independence ?

Answer 14

Honest disposition to serve