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Hello sir,
I would like to ask if a shareholder can be in the board of directors either as a NED or as an ED and if there are any limitations to that from the Corporate Governance framework. Thank you very much.In the real world it is very common for shareholders to be directors – that’s how many companies get started. And there are lots of examples of large “owner-managed” companies around.
For a listed company, however, good corporate governance requires the chair to be independent on appointment and NEDs also need to be independent. That would mean not being a shareholder.Don’t get too involved in the detail of corporate governance – this is a very small part of the AA syllabus.
Thank you, sir. Can also the board of directors not participate in the management of the company (so all would be NEDs) and appoint other employees as managers?
A balanced board would be a mix of executive and non-executive directors. A board needs executive directors with responsibility for day-to-day operations.
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