Outside counsel as a Board Member

CFAI Volume 3, Page # 221/222, Q#9

All of the following indicate Zero’s board’s lack of independence except:

a) personal relationship - _ Indicating lack of independence and I am fine with this option. _

b) service of outside counsel as a board member. _ This is relevant option, any explanation why not this right option? _

c) lack of interlocking directorships - _ Indicating lack of independence. _ _ This is answer and I am fine with this. _

Because outside counsel may have existing or previous business interests with the company that hampers true independance.

In this case the outside counsel specifically is THE outside consel for the COMPANY and hence is getting company business (and not any random unaffiliated attorney).

ro424 is there any guidance regarding outside counsel, existing or previous business interests, in CFAI Volume 3?


Thank you very much ro424 for discussion.