Which of the following is true about boards of directors?
A) They can be characterized as either inside or outside boards.
B) Board members necessarily need to own stock.
C) They cannot participate in the day-to-day operations of the organization.
D) The role the board plays as an entity should be different for inside boards and outside boards.
E) Those who do not hold management positions in the organization cannot be members of boards.

Question

Quizplus · Accepted Answer

Boards of directors can be characterized as either inside or outside boards. Inside boards have members who are also executives or employees of the organization, while outside boards have members who are independent of the organization. The other statements are false. Board members do not necessarily need to own stock, they can participate in the day-to-day operations of the organization if that is part of their role, and those who do not hold management positions can still be members of boards. The role the board plays as an entity should be consistent regardless of whether it is an inside or outside board.

Which of the Following Is True About Boards of Directors