Question 2
(a) (i) The effectiveness of non-executive directors may be limited by the following
factors:
Having the same perspective as executive directors
The corporate governance reports stress the importance of non-executive directors possessing independent judgment and being appointed by a nomination committee. However the nomination committee may restrict its search to directors who will ‘fit in ’ with the rest of the board, and may be unwilling to recruit from a diversity of backgrounds, for example stakeholders such as employees.
In addition many non-executive directors will only agree to serve on the boards of companies if they admire the company’s chairman or its way of operating.
