Why does transparency strengthen corporate governance?
Correct answer: B. It gives stakeholders reliable information for evaluating decisions and performance
- A. It prevents directors from making any business judgment
- B. It gives stakeholders reliable information for evaluating decisions and performance
- C. It allows managers to keep important risks confidential from the board
- D. It guarantees that a company will never experience financial loss
Explanation
Transparency provides accurate and timely information about performance, risks, and decisions. This improves accountability and helps investors and other stakeholders assess management.
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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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