Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › NEDs recommendation
- This topic has 1 reply, 2 voices, and was last updated 2 years ago by Kim Smith.
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- July 15, 2021 at 4:55 am #627788
maam follwinf is an extract from one of the TYUs mentioned in my kaplan text:
Scenario:
“The board consists of the chief executive officer, finance director, HR director, production director and sales director. In addition, there are two non-executive directors who were appointed last year by the chief executive as they are his aunt and uncle. Previously they ran their own small cafe and used a firm of accountants for all financial matters due to their own lack of expertise in that area.”
Recommendation:
“At least three more NEDs need to be recruited to ensure a balanced board.”
maam i just don’t understand why against 5 executive directors we need 5NEDs? don’t we need ATLEAST 6 NEDs? board consists MAJORLY (independent) NEDs, right?
so remocmmendation should have ideally been of 3NEDs excluding independent chair OR 4NEDs need to be recruited, IN MY OPINION.
what do you think ma’am?
July 15, 2021 at 7:40 am #627810Balanced means equal – remember there will also be the chairman who has a casting vote.
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