The business media is a significant external control mechanism.

Question

Quizplus · Accepted Answer

The press is not usually recognized as an external control mechanism in the literature on corporate governance. There is no denying that in all developed capitalist economies, the financial press and media play an important indirect role in monitoring the management of public corporations. In the United States, business magazines such as Bloomberg Businessweek and Fortune, financial newspapers such as The Wall Street Journal and Investors Business Daily, as well as television networks like Fox Business Network and CNBC are constantly reporting on companies. Public perceptions about company financial prospects and the quality of its management are greatly influenced by the media.

The Business Media Is a Significant External Control Mechanism