4.

Which of the following statements is FALSE?

a.

A board is said to be captured when its monitoring duties have been compromised by connections or perceived loyalties to management.

b.

On a board composed of inside, gray, and independent directors, the role of the inside director is really that of a watchdog.

c.

Even the most active independent directors spend only one or two days per month on firm business, and many independent directors sit on multiple boards, further dividing their attention.

d.

Because independent directors' personal wealth is likely to be less sensitive to performance than that of inside and gray directors, they have less incentive to closely monitor the firm.