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Which of the following is the best indicator of an effective board? a. The board of...

Which of the following is the best indicator of an effective board?

a. The board of directors is composed of outsiders.

b. The board of directors meets frequently and has good attendance.

c. The board of directors is small.

d. The board of directors contests and sometimes alters decisions made by the CEO.

e. The board of directors is diverse.

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Answer #1
  • Option e is the answer.
  • The board of directors is diverse.
  • The best indicator of an effective board is obtained when the board of directors are diverse. An effective board of directors are formed when there exists diversity within their talents and the way different situations are dealt. Diversity encourages the directors to make better decisions and to form vast number of ideas. This encourages to select the best possible solution to the existing problems and through this way the overall performance of the board can be improved.
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