Skip to content

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

Which safeguard is most relevant to ensuring that the board of a professionally managed company, rather than the executive management, controls the monitoring of financial reporting?

An Audit Committee with a majority of independent directors is the key safeguard. It lets non-executive, independent members oversee financial reporting, internal controls and auditors, checking executive management in a professionally managed listed company.

  1. AAn Audit Committee with a majority of independent directors, as required for listed companiesCorrect
  2. BA family council of promoters
  3. CA shareholder agreement granting nominee rights to the promoter
  4. DReducing the number of board meetings to one a year

Explanation

For listed companies, the Audit Committee must have a majority of independent directors, enabling independent oversight of financial reporting, auditors and internal controls. A family council or promoter nominee rights relate to promoter-driven firms, and fewer meetings weaken oversight.

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