Which of the following is an indicator of significant influence?

Representation on the Board of Directors is an indicator of significant influence because it allows an entity to participate in the policy-making processes and strategic decisions of another entity, even if it does not control it outright. This involvement often leads to the capacity to affect decisions about financial and operational policies, reflecting the power to influence the latter’s performance and financial outcomes.

Significant influence typically arises when an investor holds 20% or more of the voting power of another entity, allowing for such representation. The presence of a board member can facilitate discussions on important matters, create opportunities for sharing insights, and foster relationships that can effectively contribute to the direction and success of the company.

In contrast, direct ownership of more than 50% of shares generally constitutes control rather than just significant influence. Control implies the ability to govern financial and operating policies with a significant degree of autonomy, whereas significant influence allows for input but not control. The percentage of market share is related to competitive positioning but does not directly indicate influence over another entity's operations. Control over major decisions is also more indicative of control than of significant influence, as it suggests a decisive power over the entity rather than a mere capability to affect its policies.