Explanation:
Option D is factually incorrect and does not serve as an explanation for why independence is needed. Strict corporate governance regulations enforcing board independence (such as the Sarbanes-Oxley Act) became widespread only in the early 2000s, not over 30 years ago. Furthermore, stating that it is a regulatory requirement does not explain the fundamental rationale behind the need for independence, unlike options A, B, and C which highlight governance benefits like avoiding conflicts of interest and ensuring continuity.
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Q.85 Which of the following DOES NOT explain why the board of directors needs to maintain independence from executive teams, including the chief financial officer, chief risk officer, and the CEO?
A
Board membership may change without adversely affecting the day-to-day running of the company.
B
Independence ensures that the board does not interfere with the hiring process at the departmental level.
C
Independence helps avoid conflict of interest.
D
Independence has been a compulsory regulatory requirement in most countries for over 30 years.
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