ACCA Applied Knowledge · Financial Accounting · Duties and responsibilities of those charged with governance
Which of the following is a main role of non-executive directors on the board of a listed company?
Non-executive directors constructively challenge and help develop strategy and scrutinise the performance of executive management. They do not run daily operations, prepare tax computations or perform the external audit, which are tasks for management and the auditors.
- AManaging the company's day-to-day operations
- BConstructively challenging and helping develop strategy, and scrutinising management performanceCorrect
- CPreparing the company's tax computations
- DPerforming the statutory external audit
Explanation
Non-executive directors are not involved in daily management. Their roles include contributing to strategy, scrutinising executive performance, checking the integrity of financial information and controls, and helping decide executive pay. Tax computations and the audit are carried out by management and the external auditor respectively.
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