Skip to content

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

Shreya Textiles Ltd, a listed Indian company, has a promoter family that controls the board and ignores minority shareholders' concerns about related-party dealings. A director argues that governance is only about following statutory filings. Which view best reflects the core meaning of corporate governance?

Corporate governance is the system by which a company is directed and controlled, ensuring accountability, transparency and fairness to shareholders and other stakeholders. It goes beyond statutory filings, because it covers how the board behaves and how minority interests are protected.

  1. AA system by which companies are directed and controlled, balancing the interests of shareholders and other stakeholders with accountability and transparencyCorrect
  2. BA set of filing requirements to be completed with the Registrar of Companies each year
  3. CA method of maximising promoter returns through control of the board
  4. DA technique for reducing the tax liability of the company

Explanation

Corporate governance is the system of directing and controlling a company with fairness, accountability, transparency and responsibility towards all stakeholders. Treating it as mere filing compliance, as the director does, ignores its substance and the protection of minorities.

Did you get it right without looking?

One question tells you little. A timed set on Conceptual Framework of Corporate Governance shows your real accuracy, how long you take and where you lose marks.

Practise Conceptual Framework of Corporate GovernanceFree diagnostic mock

More Conceptual Framework of Corporate Governance questions