A key function of independent directors is to reduce conflicts of interest to

• A. Promote objective, shareholder-aligned decision making.
• B. Maximize executive incentives.
• C. Decrease board meeting frequency.
• D. Industrialize corporate governance.

Answer: (A)

Independent directors are brought in to provide objective, unbiased oversight. Because they do not have material ties to management, they can question proposals, monitor performance, and challenge strategic moves that might serve insiders rather than shareholders. This distance helps ensure decisions are guided by fiduciary duties of loyalty and care and are aligned with shareholder value in the long run. That is why the best fit is promoting objective, shareholder-aligned decision making.

Maximizing executive incentives tends to blur the line between owners and managers, worsening conflicts rather than reducing them. Decreasing board meeting frequency would weaken governance oversight, and “industrializing” governance isn’t a recognized governance objective and would not inherently reduce conflicts of interest.