CFAI - M&A - Pg289 - Q18

Ideally the ex-CEO should not be allowed to serve the Audi committee since nowhere in the vignette it was stated that he has prior experience in Auditing and stuff. Ans says that - he can server either committee - because he was independent (AGREE), did not have interlock relation (AGREE), he has required expertise in compensation commit as he serverd the other board as a member of compensation committe (AGREE) and he had prior expertise in Audit committe (DISAGREE). Vignette just says - That Steris DESIRES to server on either the audit or compensation committeed of the Moonbase board. Please help this pissed fellowmate.

I don’t think this should not be allowed… Audit committee gives opinion on management actions, so he shouldn’t be there…same reasoning for compensation committee which would determine his salary. I think his audit experience is irrelevant to evaluate whether he should be on either commitee