Topic Test question I am having a hard time interpreting. Below is the relevant part of the vignette.
The CEO will no longer be the chairman of the board.
The retired original founder of Restar will become the chairman of the board.
The board will now have a majority of members that are independent.
Which changes to the board of directors is least consistent with best practices in the composition of a board?
A. Specific choice of the new chairman of the board
B. Change in the composition of the board membership
C. Change regarding the CEO
I thought the answer was B because the board should be comprised of entirely independent board members, but that is incorrect.
Reasoning Provided: Based on best practices, the chairman of a board should not be a senior executive from the firm.
I can’t tell from the reasoning provided but is this saying that the retired founder shouldn’t be the chairman of the board? Based on the little information provided I assumed the founder being chairman was fine due to him being retired and the fact that the CEO was stepping down from chairman of the board was a best practice. That leaves the makeup of the board being the least consistent with best practices. Is anyone else looking at this in a different way?