Which of the following describes non-executive directors?

Study for the WGU ACCT3340 D215 Auditing Exam. Practice with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Non-executive directors are individuals who serve on a company’s board but are not involved in its day-to-day operations. They typically do not have a management role within the organization and are not employees of the company. Their primary function is to provide an independent perspective and oversee the management's activities, ensuring that the company is being run in the best interests of its shareholders. They can offer expertise and insights, contribute to strategy discussions, and monitor corporate governance without being directly involved in decisions that affect the daily operations of the business.

This independence allows non-executive directors to bring objectivity to the discussions and decisions made at the board level, as they are not influenced by the internal dynamics of the company. They can challenge assumptions, provide market insights, and ensure that the needs of shareholders are adequately represented. Understanding this role is vital for appreciating how effective corporate governance is maintained and how accountability in business practices is enforced.

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