ExpertMedium2 marksMultiple Choice
Syllabus B: Organisational structure, culture, governance and sustainabilitySyllabus BCorporate Governance
ACCA · Question 08 · Syllabus B: Organisational structure, culture, governance and sustainability
CodeCrafters, a tech startup, is preparing for an Initial Public Offering (IPO). To comply with corporate governance codes, they are appointing several Non-Executive Directors (NEDs) to their board.
Which of the following is a primary role of a Non-Executive Director?
CodeCrafters, a tech startup, is preparing for an Initial Public Offering (IPO). To comply with corporate governance codes, they are appointing several Non-Executive Directors (NEDs) to their board.
Which of the following is a primary role of a Non-Executive Director?
Answer options:
A.
To manage the day-to-day operations of the company.
B.
To scrutinize the performance of executive management in meeting agreed goals.
C.
To act as the primary spokesperson for the company to the media.
D.
To prepare the detailed annual financial statements.
How to approach this question
Remember that NEDs are independent and do not engage in daily management; their role is oversight, strategy, and scrutiny.
Full Answer
B.To scrutinize the performance of executive management in meeting agreed goals.✓ Correct
Non-Executive Directors (NEDs) do not have day-to-day management responsibilities. Their key roles include contributing to strategic direction, scrutinizing executive performance, ensuring financial controls are robust, and determining executive remuneration.
Common mistakes
Confusing the roles of Executive Directors (daily management) with Non-Executive Directors (oversight).
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