Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Concept of Governance in Professional Managed Company and Promoters Driven Company

Kaveri Pharma Ltd, a listed company, discloses its financials promptly, but its board hides from shareholders the fact that the CMD's relative was awarded a major contract. A director says the company is compliant because the numbers were published on time. Which governance principle is most clearly breached?

Transparency is breached. Good governance requires disclosure of all material information, including interests and related-party dealings, not only timely financial statements. Hiding that the CMD's relative received a major contract denies shareholders information needed to judge the board's conduct.

  1. ATransparency, because material related facts were not disclosedCorrect
  2. BEfficiency, because the contract was too costly
  3. CDelegation, because the CMD acted alone
  4. DRotation, because the director's tenure was long

Explanation

Transparency requires timely and accurate disclosure of all material matters, including related-party dealings, not merely financial numbers. Timely financial publication does not cure the nondisclosure, so the principle breached is transparency.

Did you get it right without looking?

One question tells you little. A timed set on Concept of Governance in Professional Managed Company and Promoters Driven Company shows your real accuracy, how long you take and where you lose marks.

Practise Concept of Governance in Professional Managed Company and Promoters Driven CompanyFree diagnostic mock

More Concept of Governance in Professional Managed Company and Promoters Driven Company questions