Syllabus B: Organisational structure, culture, governance and sustainability — ACCA Practice Question 08

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Recall the definition and purpose of a Non-Executive Director in corporate governance.

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B.To provide independent scrutiny of executive management decisions.✓ Correct

Non-Executive Directors (NEDs) are not involved in daily management. Their role is to provide independent oversight, constructive challenge to the executives, and strategic guidance, ensuring good corporate governance.

Common mistakes

Confusing the roles of Executive Directors (who run the business) with Non-Executive Directors (who oversee the executives).

A family-owned manufacturing business is preparing for an Initial Public Offering (IPO). To comply with corporate governance codes, they are appointing several Non-Executive Directors (NEDs). Which of the following is a primary role of an NED in this context?

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Practice the full ACCA BT — Business & Technology Practice Exam 1

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