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ACCA Strategic Professional · Strategic Business Leader · The board of directors

Kestrel Foods plc has a unitary board. The chair, Amara, also acts as chief executive and dominates every decision. Two shareholders complain that no one on the board can challenge her. Which governance weakness does this most directly illustrate?

The weakness is the lack of separation between chair and chief executive. Combining the roles concentrates power in one person, reduces independent challenge, and weakens board accountability to shareholders, which is why governance codes recommend splitting the roles.

  1. ALack of separation between the roles of chair and chief executive, concentrating power in one individualCorrect
  2. BExcessive use of board committees reducing the board's collective responsibility
  3. CFailure to appoint a company secretary to maintain statutory records
  4. DOver-reliance on external auditors for strategic decisions

Explanation

Best practice codes separate the chair, who leads the board, from the CEO, who runs the business. Combining them concentrates power and weakens challenge and accountability. The other options describe issues not present in the case.

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