Under which of these conditions is private governance most likely to emerge?

Question

Quizplus · Accepted Answer

When firms with highly visible brands are more vulnerable to reputational damage, private governance is most likely to emerge. This is because these firms are more visible to the public and face more scrutiny, creating a greater incentive to ensure that their social and environmental performance is up to par. Private governance mechanisms can help these firms establish and maintain their reputations by setting standards and monitoring compliance.

Under Which of These Conditions Is Private Governance Most Likely