- CFA Exams
- CFA Exam: Level I 2021
- Study Session 10. Corporate Finance (1)
- Reading 31. Introduction to Corporate Governance and Other ESG Considerations
- Subject 7. Corporate Governance and Stakeholder Management Risks and Benefits
CFA Practice Question
Which is NOT a benefit of an effective corporate governance structure?
B. Lower executive compensations
C. Lower default risk
A. Higher credit ratings
B. Lower executive compensations
C. Lower default risk
Correct Answer: B
An effective corporate governance structure encourages "proper" remuneration policies that motivate managers to maximize shareholder value. Lower executive compensations is not always better for the company.
User Contributed Comments 0
You need to log in first to add your comment.