Skip to content

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

Meera Foods Ltd, run by its founder family, plans to move from family-led to professional management. Which step would best strengthen governance during the transition?

The best step is separating ownership from management and backing it with an empowered independent board and clear written policies. This creates accountability and objective oversight, whereas appointing family members as independents, dropping committees or relying on oral decisions would weaken governance.

  1. ASeparating the roles of ownership and management with an empowered independent board and clear policiesCorrect
  2. BAppointing only family members as independent directors
  3. CRemoving the audit committee to speed decisions
  4. DKeeping all key decisions with the founder verbally

Explanation

Professionalisation needs a separation between owners and managers supported by an independent, empowered board and documented policies and accountability. Family members cannot be independent, and removing committees or relying on oral decisions weakens control.

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