ACCA Strategic Professional · Strategic Business Leader · Governance scope and approaches
Castelo Group's board is deciding how to report on governance. The chair proposes publishing only financial results, because 'governance disclosure is optional for a voluntary code'. The company secretary points out that the OECD Principles call for timely and accurate disclosure on all material matters. Which of the following items would the OECD disclosure principle expect Castelo to include in addition to financial results?
The OECD disclosure principle expects material information beyond financial results, including ownership and voting structures, board and executive remuneration, related-party transactions and foreseeable risk factors. It does not require trade secrets or directors' private tax affairs, and it does not allow disclosing only favourable news.
- AOnly the personal tax affairs of each director
- BMaterial information such as ownership and voting structure, remuneration of board members and key executives, and foreseeable risk factorsCorrect
- CThe detailed trade secrets underlying its product pricing
- DOnly matters that management considers favourable to the share price
Explanation
The OECD disclosure and transparency principle expects material information beyond financial results, including ownership and control structures, remuneration policy, related-party transactions and foreseeable risks. It does not require disclosure of competitively sensitive trade secrets or private tax affairs, and it rejects selective disclosure of only favourable news.
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