Corporate Governance Definition and Principles
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Questions and Answers

What does corporate governance refer to according to the World Bank?

  • The process of balancing stakeholders' interests
  • A system of rules, practices, and processes for business organizations (correct)
  • The relationship between corporate managers and entrepreneurs
  • The mechanisms for protecting outside investors

    • Which aspect of corporate governance involves protecting outside investors from insiders' expropriation?

  • Process through which shareholders induce management
  • Balancing stakeholders' interests
  • Mechanisms through which outside investors protect themselves (correct)
  • System of rules, practices, and processes

    • According to the OECD, what does corporate governance involve?

  • Laws, regulations, and accepted business practices (correct)
  • The relationship between corporate managers and entrepreneurs
  • A process through which shareholders induce management to act in their interest
  • Balancing the interests of a company's stakeholders

    • In a market economy, corporate governance governs the relationship between:

    <p>Corporate managers and entrepreneurs on one side and investors on the other</p> Signup and view all the answers

    What is the main purpose of corporate governance?

    <p>To provide confidence in capital markets</p> Signup and view all the answers

    Who are the stakeholders whose interests need to be balanced in corporate governance?

    <p>Management and shareholders</p> Signup and view all the answers

    What is the primary focus of corporate governance as defined in the text?

    <p>Enhancing business prosperity and corporate disclosure</p> Signup and view all the answers

    What is the joint responsibility imposed on the Board of Directors and management?

    <p>Protecting shareholder rights and enhancing shareholder value</p> Signup and view all the answers

    How does the Board of Directors act as a check against management according to the text?

    <p>Ensuring accountability to shareholders and acting transparently</p> Signup and view all the answers

    Which party is NOT listed as a key player in good corporate governance according to the text?

    <p>Vendors</p> Signup and view all the answers

    What are some benefits of good corporate governance mentioned in the text?

    <p>Enhanced credibility, improved valuations, better marketability</p> Signup and view all the answers

    What principles are part of corporate governance according to the text?

    <p>Rights and Equitable Treatment of Shareholders only</p> Signup and view all the answers

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