SECTION C: ANSWER ALL QUESTIONS IN THIS SECTION $(20$ MARKS$)$

READ THE CASESTUDY BELOW AND ANSWER THE QUESTION$($S$)$ THAT FOLLOW

BEC Company $($Pty$)$ LTD is an electricity distributor in Lesotho. It currently distributes electricity through a network of cables to local companies and Lesotho citizens. BEC shares are owned by three other companies with an interest in the company$$s profitability. The board of BEC has made a proposal to import electricity from Mozambique, adding to the two already existing transmission networks which are $$Muela Hydropower and ESKOM respectively. The CEO and minority shareholders are unhappy about this proposal, their reason being that the operations and profitability of BEC are satisfactory.

BEC for many years has been dominated by the CEO because of his $20$ years employment in the company. The Board has never voted against him, challenged, or disagreed with his proposals since they are closely associated and appointed by him. The minority shareholders had recently voiced their opinions regarding the lack of truly independent non$-$executive directors $($NEDs$),$ as those appointed are very close business associates to the CEO. This proposal was dismissed by the CEO as he emphasized that he knew BEC better than anyone and will decide on what is best for the company.

His view was that all the members of the board, who he appointed were experts in their respective duties and had a diverse skillset needed to direct the company. Some of the Executive Directors did not understand the concerns of the minority shareholders.

QUESTION $1$

Explain in detail what an independent non$-$executive director is$.(5$ marks$)$

QUESTION $2$

Identify and explain any FIVE $(5)$ roles of the NEDs in the board operations. $(10$ marks$)$

QUESTION $3$

Explain why the already existing NEDs are not considered independent, refer to the case study. $(5$ marks$)$