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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Conceptual Framework of Corporate Governance

Mehta Infra Ltd, a listed company, is told its governance is 'compliant but not effective': every checklist item is ticked, yet the board does not discuss strategy or risk meaningfully. This criticism best reflects the difference between which two approaches?

The criticism contrasts form-based box-ticking compliance with substance-based governance culture. The company satisfies every formal requirement yet the board does not genuinely engage with strategy or risk, so governance exists on paper but is not effective in practice.

  1. AVoluntary codes versus statutory penalties
  2. BForm-based box-ticking compliance versus substance-based governance cultureCorrect
  3. CPrinciple of accountability versus principle of fairness
  4. DExecutive versus non-executive directors

Explanation

The company meets formal requirements, which is box-ticking, but lacks real engagement in strategy and risk, which is the substance of governance. The other pairs do not describe this contrast.

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