Which director is not an employee or officer and serves on the board?

• A. Inside Director
• B. Outside Director
• C. Independent Director
• D. Nonexecutive Director

Answer: (B)

The key idea is distinguishing directors by their employment relationship to the company. An inside director is someone who is also an employee or officer, so they sit on the board while being part of management. A director who is not an employee or officer fits the label outside director. An independent director is a subset of outside directors who also meets criteria to be free of management ties, ensuring objectivity. A nonexecutive director generally means a director not involved in day-to-day management, which often overlaps with outside directors but doesn’t specify employment status as clearly. Since the requirement is not an employee or officer, the designation that directly communicates that relationship is outside director.