Ron is a director of start-up inc. he is also a chief corporate officer in the firm and receives compensation for both positions. He is an inside director.
Inside director is a member of the board of directors who is an employee, officer or a person directly related to the company. Both the inside director and the outside director have a fiduciary duty to the company of the board on which they sit. They must always act in the best interests of the company. Due to their expert knowledge of the inner workings of the company, inside directors can be a key factor in a company's success.
Inside directors typically include the company's senior executives, such as the chief executive officer (COO) and chief financial officer (CFO), as well as representatives of major shareholders, who give borrowers and other stakeholders, such as unions.
An institutional investor considering making a substantial investment in a company often decides to appoint one or more representatives to the company's board of directors.
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