Why Should You Have One or Two Board Members Who

question 24

Multiple Choice

Why should you have one or two board members who can be considered independent?

• A)So they can act in the interest of the principal owner
• B)They are not susceptible to potential conflicts of interest
• C)They usually make the final decisions
• D)They have a long list of business and professional contacts
• E)They will answer the majority of the entrepreneur's questions

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Definitions:

Net Income

The amount of profit a company has left over after all expenses and taxes are deducted from total revenue.

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders, including restricted shares owned by the company’s officers and insiders as well as those held by the public.

Liquid Assets

Assets that can be quickly converted into cash without significant loss of value, facilitating financial flexibility.

Plant and Equipment

Tangible long-term assets owned by a business, used in the production or supply of goods and services.