This question probably won’t come up, but why do you want 75% independant directors? If I owned 40% of the company, I would probably want representation roughly around there. Is is for the small shareholders so that I can’t use my influence with 40%?
Board of directors typically dont own large portions of the company. They only direct the company for a nominal fee. In an ideal situation board has no stake in the company at all; just a salary.
That just sounds kind of strange to me. As an owner you now hire a director who then hires someone else to run the company. You are adding more layers to the agent problem.
I suppose you just hope you hire good/ethical directors to represent you even though they have no stake in the company.
Hi guys Stupid question, but came to me 2 days before the exam Dictionary is not helpful in this matter, as different editions state this in different ways. I always thought are two organs in companies - Board of Directors and Supervisory Board . Is the way that CFA presents this matter - managements is this first organ, or we have 3 different layers - managers, directors, supervisors ? sorry for stupid question, the closer to real exam, the more foolish questions come up in my head