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

Shreeram Textiles Ltd, a listed company, has a board that meets only to approve decisions already taken by its promoter-chairman. Independent directors rarely question proposals. Which governance concern does this fact pattern most directly illustrate?

The facts show a lack of board independence and objective oversight. The board simply approves what the promoter-chairman has already decided and independent directors do not challenge proposals, which defeats the board's monitoring role that corporate governance frameworks are designed to protect.

  1. ALack of board independence and objective oversightCorrect
  2. BExcessive disclosure to stakeholders
  3. COver-reliance on external auditors
  4. DWeak shareholder dividend policy

Explanation

A board that merely rubber-stamps the promoter's decisions lacks independent, objective oversight, which is a core governance weakness. The facts say nothing about disclosures, auditors or dividends, so those options do not fit.

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