Question of the Week

Of the following, which is the least necessary qualification for a member of a company’s Board of Directors?

A. Being in good standing with management

B. Having attentive and competent expertise

C. Regularly attending meetings

If I were taking the CFA exam, I’d answer A.

If you asked me on the street, I’d say “anything but A”.

It is not necessary for a Board member to enjoy talking with management , or vice versa. And while antagonism isn’t necessarily the goal, you don’t want the Board to become too close with management, or they may lose some independence.

^Great textbook answer. Bears little resemblance to real life.