Question

A company is planning to conduct an IPO and has decided to list its stock on Nasdaq. If the company currently has nine directors on its board, but only four of them are independent, the company must appoint a minimum of:

Answer 1

Answer: D. Two new independent directors

Step-by-step explanation:

Nasdaq rules require that companies listing should have more independent directors on a board than dependent ones as it is believed that they would be able to better protect the interests of shareholders.

In order to fulfill this requirement therefore, the company would have to appoint two new independent directors which would increase the number of directors to 11 and the number of independents to 6 thereby giving them a majority.