CFA Practice Question

CFA Practice Question

Which of the following is incorrect?
A. Compensation of the Directors being linked to share price performance is a good corporate governance practice.
B. A staggered Board of Directors is a good corporate governance practice.
C. Key committees formed by board members include Audit, Compensation, Nominating, and Corporate Governance.
Explanation: A staggered board enables the board and management to become entrenched.

User Contributed Comments 2

User Comment
praj24 Also known as a classified board. - A board that is made up of different classes of directors (usually 3 classes)

"opponents of staggered boards, however, argue that they are less accountable to shareholders than annually elected boards and that staggering board terms tend to breed a fraternal atmosphere inside the boardroom that serves to protect the interests of management above those of shareholders" - Investopedia
harrybay Staggered board are bad for capitalism
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