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CSEET · Economic and Business Environment · Elements of Corporate Governance

Which statement best describes corporate governance in the context of a company?

Corporate governance is the system of rules, practices and processes by which a company is directed and controlled. It balances the interests of shareholders, management and other stakeholders, and aims at accountability, fairness and transparency, unlike tax computation, recruitment or marketing, which are separate business functions.

  1. AThe system of rules, practices and processes by which a company is directed and controlledCorrect
  2. BThe method of calculating a company's annual taxable profit
  3. CThe process of recruiting and training junior employees
  4. DThe technique of marketing a company's products to customers

Explanation

Corporate governance is the framework of rules, relationships, systems and processes through which a company is directed and controlled, balancing the interests of shareholders, management and other stakeholders. The other options describe taxation, human resources and marketing, which are unrelated functions.

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