CFA Level I · CFA Level I Exam · Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits
An investor integrates ESG considerations into the analysis of a manufacturing company. The factor that is best described as a governance consideration is the:
Audit committee independence is the governance consideration. It relates to board structure and oversight of management and reporting. Carbon emissions per unit are an environmental factor, and workplace safety records are a social factor, so neither is governance in the ESG framework.
- Acompany's carbon emissions per unit produced
- Blevel of independence of the audit committeeCorrect
- Ccompany's workplace safety record
Explanation
Audit committee independence concerns board structure and oversight, which is governance. Carbon emissions are environmental and workplace safety is a social factor.
Did you get it right without looking?
One question tells you little. A timed set on Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits shows your real accuracy, how long you take and where you lose marks.
More Corporate Governance: Conflicts, Mechanisms, Risks, and Benefits questions
- A company's board ignores rising supply-chain labor violations and climate-related physical risks to its plants. An analyst is most likely t…
- A company combines the roles of chair of the board and chief executive officer in one person. The governance risk that is most likely height…
- Which of the following is most likely a function of an independent whistleblowing channel within the stakeholder management infrastructure?
- Which of the following is the most likely benefit to a company of having effective corporate governance?
- Which of the following is most likely a benefit of effective corporate governance for a company?
- A company's board has 12 members. Its remuneration committee has three members: two independent directors and the CEO's longtime friend, who…