The control model of corporate governance is applicable under all of the following conditions except for

Question

Quizplus · Accepted Answer

The control model of corporate governance is designed for situations where equity ownership is concentrated among a small number of investors, allowing them to effectively control the company. In situations where equity ownership is widely dispersed, the control model is less applicable because no individual or group of investors has enough power to exert significant control over the company. Therefore, option D is the correct answer. Option A is incorrect because illiquid capital markets do not directly affect the applicability of the control model. Option B is incorrect because a large number of insider board members would typically be a characteristic of the control model. Option C is incorrect because ownership and control overlap is a key characteristic of the control model.

The Control Model of Corporate Governance Is Applicable Under All