ITPEC FE Morning April 2023 Question 76
To secure transparency in business administration, which of the following is a concept that supervises and monitors a company's activities from the perspective of questions such as for whom the company runs its business, how top management is structured, and whether the organization has self-improvement capabilities?
Explanation
Corporate governance — the mechanism that supervises a company's management so that the company is run transparently and in its stakeholders' interest.
Corporate governance asks whose interests the company serves (shareholders and other stakeholders), how top management is structured and checked (board of directors, outside directors, auditors), and whether the organisation can correct itself. Its aims are transparency, accountability and preventing misconduct by management. IT governance is the part of it that covers information systems.
Answer (b)
Why not others:
- •(a) Core competence — the core capability that sets a company apart from its competitors, a strategy concept, not a way of supervising management
- •(c) Corporate identity — the unified image and values a company presents inside and outside, through its philosophy, logo and design
- •(d) Stakeholder analysis — identifying the parties affected by a company or project and assessing their interests and influence, a planning technique rather than ongoing oversight of management
Key rule: Questions about who oversees top management, in whose interest the company is run, and transparency point to corporate governance.
Corporate Activities · AI-written, may contain errors
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