Sage Corporation has suffered a series of losses in recent years. Its shareholders are considering restructuring Sage's Board of Directors (BOD). Using Donaldson's (1999) theory, what kind of BOD will the shareholders adopt and why?

Select one:

a. Shareholders will appoint an independent BOD because they will work closely with management to turn the company around.

b. Shareholders will appoint an independent BOD because management needs to be given more freedom of action to better manage risks.

c. Shareholders will appoint an independent BOD who will question management's risk taking activities.

d. Shareholders will appoint a dependent (or non-independent) BOD with the CEO also being Chairman.

e. Stakeholders will demand an independent board.