Improving Board Independence at ABC Corporation

Medium Corporate Governance Board Of Directors

ABC Corporation is reviewing its corporate governance practices, particularly focusing on the effectiveness of its Board of Directors. Recently, some stakeholders have raised concerns about the lack of independence among board members, as several directors have long-standing relationships with the company’s senior management.

The board currently consists of 10 members, of which only 2 are independent directors. The board believes that its composition provides necessary insight and experience.

In light of this situation, the company is considering various compositions for its board to better align with corporate governance best practices. Which of the following options would most likely improve the board’s ability to act independently and serve the best interests of shareholders?

Maintaining the current board structure but increasing the frequency of board meetings.

Increasing the number of independent directors to at least 50% of the board.

Establishing a nominating committee comprised solely of insider directors to recommend future board appointments.

Hint

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