AGRC International Certified Corporate Governance Officer ICCGO Exam Questions

Best practices in family business corporate governance recommend that the board of directors should ideally consist of 7 to 9 members. A board of this size is large enough to provide a diverse mix of skills, experience, and independent perspectives, while remaining small enough to allow effective communication, decision-making, and accountability. It also enables the inclusion of both family and independent directors, helping to balance family interests with sound corporate governance. Therefore, A. Ranging from 7 to 9 members is the correct answer.

A key requirement for an independent board member is the ability to make objective and unbiased decisions without being influenced by significant financial interests. Owning 10% or more of a company's shares is generally considered a substantial ownership stake that may compromise a director's independence by creating a potential conflict between personal financial interests and the interests of all shareholders. Therefore, such ownership is regarded as an obstacle to board independence. In contrast, owning 3% or 5% of the company's shares is generally not considered sufficient, by itself, to impair independence under many corporate governance guidelines. Hence, C. The member owning 10% or more of the company's shares is the correct answer.