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DEF Co operates in a country where the government has adopted a principles-based approach to regulation Companies are encouraged to adhere to generally accepted good standards of corporate governance. DEF Co wishes to reappoint two of its non-executive directors to the board for a third term of three years. It believes that this is in the best interest of the company and its shareholders. However the code of practice applicable to listed companies such as DEF Co states that non-executive directors should serve a maximum of two terms of three years
What action should DEF Co take?
Seek permission from the government to reappoint the non-executive directors
Reappoint the non-executive directors and explain the reasons for its actions in the annual report
Reappoint the non-executive directors and make no reference to this in its annual report
Appoint new non-executive directors to replace those who have served two terms of three years
Answer is A.
Cooperate Governance is principle based approach so why we are so bounded to appoint NEDs we need.
I did B.
I would have gone for b too.