Board of Directors and Independent Directors' Roles

Medium Corporate Governance Board Of Directors

At a recent board meeting for XYZ Corporation, the board of directors is reviewing the company's performance and discussing potential strategies for improving shareholder value. As part of this review, they consider their current board structure, which includes a mix of executive and independent directors.

The Chairperson of the Board expresses concern that the current ratio of independent to executive directors may not be optimal for effective corporate governance. The board is particularly interested in understanding the roles of independent directors and the impact of their presence on decision-making processes.

Which of the following statements best aligns with best practices in corporate governance regarding the responsibilities of the board of directors?

Independent directors are primarily responsible for operational decisions and daily management, ensuring the company's goals are met efficiently.

A higher proportion of independent directors enhances board effectiveness by providing unbiased oversight and reducing potential conflicts of interest.

The roles of executive directors should be minimized in governance to prevent any influence over the company's strategic direction.

Hint

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