Question：Which TWO of the following are features of poor corporate governance?
A. Focus on short-term profitability
B. Critical questioning of senior managers by external auditors
C. Domination of the board by a single individual
D. Supervision of staff in key roles
The correct answers are:
Domination of the board by a single individual
and
Focus on short-term profitability
Rationale: This is a feature of poor corporate governance because it makes way for self-interested decision-making; as does an emphasis on short-term profitability (which can cause pressure to conceal problems or manipulate accounts).The others may 'look' like negatives, but are in fact the opposites of two other features of poor corporate governance: lack of independent scrutiny; lack of supervision.
Ways in: You could have got to the answer with logic, with a sound grasp of corporate governance - but it would be worth learning the list of features of poor corporate governance, so you can recognise them in an exam question.
写评论
