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What is the weaknesses of cross directorship
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Updated: 9/17/2019
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14y ago

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In a typical cross-directorship situation, a director of company X becomes a director of company Y, and likewise a director of Y joins the Board of X. This sort of mutual arrangement can help to emphasise links between 2 companies, but may also lead to directors having conflicts of interest as they are naturally thinking about their other directorship (a linked company) instead of the company they are sitting in. If such arrangements are fully disclosed, the rest of the Board (and the shareholders) should be able to judge the director's actions, but cross-directorships still represent a danger and are not viewed in a positive light by most codes of corporate governance

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Q: What is the weaknesses of cross directorship
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What is cross directorship?

cross directorship represents a threat to efficient working of remuneration committees. a cross directorship is said to exist when two or more directions sit in the boards of other. in practice, it compromises some cross-shareholding which further compromises the independence of the directors. of of the directors is likely to be non executive director in most of the cases.


What is directorship?

cross directorship represents a threat to efficient working of remuneration committees. a cross directorship is said to exist when two or more directions sit in the boards of other. in practice, it compromises some cross-shareholding which further compromises the independence of the directors. of of the directors is likely to be non executive director in most of the cases.


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