Inside Director

AAA

DEFINITION of 'Inside Director'

A board member who is an employee, officer or stakeholder in the company. Inside directors - and outside directors, for that matter - have a fiduciary duty to the company of which board they sit on, and are expected to always act in the best interests of the company. Because of their specialized knowledge about the inner workings of the company, a strong board of inside directors is a key element in its success.

INVESTOPEDIA EXPLAINS 'Inside Director'

Inside directors typically include a company's top executives, such as the chief operating officer, the chief financial officer and the chief operating officer, as well as representatives of major shareholders and lenders, and representatives of other stakeholders, such as labor unions.

An institutional investor who is considering making a sizable investment in a company will often insist on appointing one or more of the investor's representatives to the company's board of directors as a condition of such investment.




RELATED TERMS
  1. Non-Executive Director

    A member of a company's board of directors who is not part of ...
  2. Insider Buying

    The purchase of shares of stock in a corporation by someone who ...
  3. Board Of Directors

    An appointed or elected body or committee that has overall responsibility ...
  4. Conflict Of Interest

    A situation where a professional, or a corporation, has a vested ...
  5. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  6. Outside Director

    Any member of a company's board of directors who is not an employee ...
Related Articles
  1. How To Become A Corporate Board Member ...
    Personal Finance

    How To Become A Corporate Board Member ...

  2. Evaluating The Board Of Directors
    Insurance

    Evaluating The Board Of Directors

  3. The Basics Of Corporate Structure
    Investing Basics

    The Basics Of Corporate Structure

  4. Do ETFs have a board of directors?
    Investing

    Do ETFs have a board of directors?

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center