Sound governance practices always leads to superior financial performance.

Question

Quizplus · Accepted Answer

Sound governance practices often lead to superior financial performance. However, this is not always the case. For example, practices such as independent directors (directors who are not part of company management) and stock options are generally assumed to result in better performance. But in many cases, independent directors may not have the necessary expertise or involvement, and the granting of stock options to the CEO may lead to decisions and actions calculated to prop up share price only in the short term.

Sound Governance Practices Always Leads to Superior Financial Performance