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!
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NEDs
12y ago#1Yes - it is right (I don't think that BPP would say it otherwise :-) )
What is right?that NEDs can have shareholdings in a company and be independent?
Thanks in advance
12y ago#3Yes - provided that it is not a controlling shareholding.
The are still independent of the management of the company.
But if mngmthas an incentive to overstate profits and hence share price,the wont the interests of NEDs and mngmt be aligned?
12y ago#5But 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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