Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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Which is NOT a characteristic of a non-executive director (NED)?

Independence from the management
Involvement in daily operations
Ability to provide strategic guidance
Contribution to governance

The correct answer is: Involvement in daily operations

A non-executive director (NED) is characterized primarily by their independence from the management of the company. This independence allows them to provide unbiased oversight of the company's strategies and policies without being influenced by the daily operations. NEDs do not involve themselves in the daily operations of the company; instead, their focus is on governance, strategic guidance, and providing an outside perspective that contributes to the overall health of the organization. Their role includes contributing to the governance framework by ensuring accountability and transparency while also offering their expertise to help shape and guide strategic decisions. Incorporating these aspects, option B accurately reflects a characteristic that does not align with the role of a non-executive director, distinguishing it from their other core responsibilities such as independence from management, strategic guidance, and contributions to governance.