Reference no: EM132293682
Ask this question:
Suppose that you were serving as a director. How would you determine whether your current board was too big or too small, i.e., how would you determine the optimal board size?
Do peer review of this question:
Do you think there should be term limits for directors? Why or why not? Do you think opinions on this would differ between CEOs, directors, and shareholders?
Peer's answer: In my opinion, directors should have term limits. Because directors should be changed according to the process of the company's operation.
The company needs to refresh its boards after a long or short periods not only to make sure it can follow the pace of the market, but also to make sure directors' work can be done efficiently. In my opinion, CEOs, directors and shareholders have different opinions on this question. CEOs may not want directors to have term limits. CEOs and directors can create a strong connection after a long term of cooperation.
They know each other well and they may have a agreement to make sure the continuous operation of the company. If directors have term limits, it may cause some difficulties for CEOs to take more time to work with new directors and create new connections. Directors may want term limits. Because working as a director is a very stressful work. As a director, he or she not only have to work with the management of the company to make sure the company keep operating, but also have to communicate with shareholders to make sure their benefit can be served.
In this case, directors may need term limits to make sure they can get some rest have a term of stressful work. Shareholders' opinion depends on whether their benefit can be ensured. Shareholders care their benefit. All they want the company to do is to grow profit and make them rich. Once they found themselves earn money because of the directors of the company' hard work, they may not want to change these directors quickly. However if they lose money, they may want these directors to be changed.