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    Question

    Which of the following reflects a sign of strong

    corporate governance practices?
    A The Chief Executive Officer (CEO) role is separated from the Chairperson role on the Board. Correct Answer Incorrect Answer
    B Independent directors form only a minority portion of the company’s board. Correct Answer Incorrect Answer
    C Independent directors can interact with shareholders only in the presence of the entire board. Correct Answer Incorrect Answer
    D Only A Correct Answer Incorrect Answer
    E Only B and C Correct Answer Incorrect Answer

    Solution

    Good corporate governance ensures accountability, transparency, and checks on management power. • Separation of CEO and Chairperson roles (A): This prevents excessive concentration of authority in one individual and strengthens oversight. SEBI, based on recommendations of the Uday Kotak Committee, mandated this separation for the top 500 listed companies(effective April 1, 2020). This is a hallmark of good governance. • Independent directors forming only a minority (B): This weakens governance since SEBI recommends that at least 50% of the Board consist of independent directors (previously 33%). • Independent directors restricted in meeting shareholders (C): Limiting their ability to independently interact with shareholders undermines transparency and accountability.

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