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NEDs

This topic has 5 replies, 2 voices, and was last updated 11 years ago by John Moffat.

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May 1, 2014 at 9:34 am #166989
hasanali95
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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
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Yes – it is right (I don’t think that BPP would say it otherwise 🙂 )
May 2, 2014 at 9:35 am #167098
hasanali95
Member
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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
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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
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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
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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.
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