Which of the following is the most important reason that regulators want there to be at least one independent director on the boards of financial institutions?

Multiple Choice

• Because independent directors are apt to be more honest.

• Because independent directors are better able to guide the financial institution into the future.

• Because the CEO and CFO might produce innacurate financial statements.

• Because independent directors are apt to know the company better than management.

• Because management cannot be trusted to act in the best interest of bond and equity holders.