Evidence indicates that companies with sound corporate governance systems show higher profitability and investment performance measures relative to those with weaker structures.
A. Strategic policy risk: the possibility that management may undertake certain empire building transactions that would ensure their job security at the expense of shareholder interests.
Business is risky in nature. Some of the most successful companies today had to allow their inherent risk to increase in the pursuit of higher returns. Thus, the business risk inherent in a company is the answer least related to the issue of a weak corporate governance system.