An Independent Outside Director

question 61

Multiple Choice

An independent outside director:

• A) is defined as a company employee who has no management responsibilities outside of the board.
• B) cannot serve as the board chairman.
• C) is prohibited from owning shares of the firm.
• D) can be a shareholder as long as he/she holds no management position in the firm outside of the board.

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Definitions:

Guarantor

A person or entity that agrees to be responsible for another's debt or obligations in the event that the latter defaults or fails to meet their contractual obligations.

Secured Debt

A type of debt that is backed by collateral to reduce the risk for the lender, allowing the lender to reclaim the asset if the debt is not paid.

Builders' Liens

Legal claims against a property by workers or suppliers who have not been paid for services or materials provided in the construction or improvement of that property.

Settlements

Agreements reached by parties in a dispute outside of court, often involving a compromise.