What is the main governance benefit of separating the roles of chief executive officer and board chair?
Correct answer: A. It strengthens independent oversight of management
- A. It strengthens independent oversight of management
- B. It removes the need for financial reporting
- C. It transfers ownership to company employees
- D. It guarantees higher annual profits
Explanation
Separate leadership roles reduce the concentration of authority in one person and allow the board to supervise management more independently. This arrangement does not guarantee profits or eliminate reporting duties.
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About Business Ethics and Corporate Governance
Business ethics applies principles such as honesty, fairness, responsibility and transparency to decisions involving employees, customers, investors, competitors and society. Corporate governance covers the board of directors, accountability, disclosure, internal controls, stakeholder interests, agency conflicts, corporate social responsibility, codes of conduct and whistleblowing.
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