- CFA Exams
- CFA Exam: Level I 2021
- Study Session 10. Corporate Finance (1)
- Reading 31. Introduction to Corporate Governance and Other ESG Considerations
- Subject 8. Analyst Considerations in Corporate Governance and Stakeholder Management
CFA Practice Question
A board member will not be considered independent if ______
II. he used to be the national sales manager for the company but quit before he was elected a board member.
III. his wife works for an accounting firm which is the auditor for the company.
I. his daughter works for the company as a secretary.
II. he used to be the national sales manager for the company but quit before he was elected a board member.
III. his wife works for an accounting firm which is the auditor for the company.
Correct Answer: All of them
All of these relationships are considered "material relationships."
User Contributed Comments 7
| User | Comment |
|---|---|
| magicchip | Talk of overkill. |
| boddunah | ha ha ha ha |
| jpducros | What about if answer I was : His daughter works for the company as a carpet cleaner. Would that create also a material relationship ? |
| bani007 | Still would not be independent because he would try to promote his daughter |
| jayj001 | some power-wielding secretary |
| gulfa99 | way to go..from a cleaner to a ceo :) |
| schweitzdm | Rather funny. But a very good question jpducros, thanks for posing it. |