Why was the "comply or explain" approach to corporate governance problematic?

Question

Quizplus · Accepted Answer

The "comply or explain" approach allowed corporations to deviate from standard corporate governance rules, but required them to provide explanations for doing so. The problem with this approach was that the definition of what constituted an acceptable explanation was vague, leading to inconsistencies in its application. There were no strict penalties for non-compliance, making the approach less effective.

Why Was the "Comply or Explain" Approach to Corporate Governance