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Basic Question 1 of 13

Which of the following best defines the concept of corporate governance?

A. A system for monitoring managers' activities, rewarding performance, and disciplining misbehavior
B. Identifiable and measurable accountabilities for all stakeholders
C. Corporate values and governance structures that ensure business is conducted in an ethical, competent, fair, and professional manner
D. A system of principles, policies, and procedures used to manage and control the activities of a corporation so as to overcome conflicts of interest inherent in the corporate form

User Contributed Comments 4

User Comment
danlan It's more used to overcome conflicts among different group in a same corporate, that's why D and not A
Poorvi I thought it was C! That is Corporate Ethics I guess.
group D is a more complete answer since it talks about priniciples, policies and procedures used to manage and control activities of a corporation in order to overcome conflicts of interest inherent in the corporate form.
ascruggs92 It is also not A because it is not just to monitor management, but to look out for shareholders best interests in general
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

Learning Outcome Statements

evaluate the effectiveness of a company's corporate governance policies and practices;

CFA® 2025 Level II Curriculum, Volume 3, Module 17.