BPP Black Friday sale!

40% discount on all BPP books specially for OpenTuition students!
Get it here >>

NEDs

This topic has 5 replies, 2 voices, and was last updated 10 years ago by John Moffat.

Viewing 6 posts - 1 through 6 (of 6 total)

Author
Posts
May 1, 2014 at 9:34 am #166989
hasanali95
Member
- Topics: 239
- Replies: 248
Independent NEDs should have no connections with the company other than fees and shareholdings(bpp kit pg102 answer to Q6)
Is this right?
Cz shareholding is actually a significant connection with the company!
May 1, 2014 at 5:29 pm #167029
John Moffat
Keymaster
- Topics: 57
- Replies: 54482
Yes – it is right (I don’t think that BPP would say it otherwise 🙂 )
May 2, 2014 at 9:35 am #167098
hasanali95
Member
- Topics: 239
- Replies: 248
What is right?that NEDs can have shareholdings in a company and be independent?
Thanks in advance
May 2, 2014 at 9:52 am #167099
John Moffat
Keymaster
- Topics: 57
- Replies: 54482
Yes – provided that it is not a controlling shareholding.
The are still independent of the management of the company.
May 2, 2014 at 6:05 pm #167162
hasanali95
Member
- Topics: 239
- Replies: 248
But if mngmthas an incentive to overstate profits and hence share price,the wont the interests of NEDs and mngmt be aligned?
May 3, 2014 at 10:07 am #167198
John Moffat
Keymaster
- Topics: 57
- Replies: 54482
But overstating profits is not likely to be something discussed at a directors meeting with NED’s present anyway 🙂
NED’s are more concerned with strategy rather than the short-term.
However…….the rule is as per what BPP has quoted.
Author
Posts

Viewing 6 posts - 1 through 6 (of 6 total)

You must be logged in to reply to this topic.