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CSEET · Economic and Business Environment · Elements of Corporate Governance

The principle of accountability in corporate governance most directly requires that:

Accountability requires that the board and management answer to shareholders and other stakeholders for their decisions and performance. They must explain and justify their actions and accept responsibility for results. Fixed dividends, promoter-related directors or one-person decisions do not reflect this principle and may weaken it.

  1. AThe board and management answer to shareholders and stakeholders for their decisions and performanceCorrect
  2. BShareholders must receive a fixed dividend every year
  3. CDirectors must be related to the promoters
  4. DAll decisions must be taken by the managing director alone

Explanation

Accountability means that those who direct and manage the company must explain and justify their actions to shareholders and other stakeholders. A fixed dividend is not a governance requirement, and concentrating decisions in one person weakens accountability rather than strengthening it.

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