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    Question

    Which of the following is most likely a sign of a good corporate governance structure?

    A.    The chief executive position is separate from the chairperson position on the company’s board.

    B.    Independent board members comprise a minority proportion of the company’s board.

    C.   Independent board members are allowed to meet shareholders only in the presence of the entire board.

    A Only A Correct Answer Incorrect Answer
    B Only B Correct Answer Incorrect Answer
    C A and B Correct Answer Incorrect Answer
    D B and C Correct Answer Incorrect Answer
    E A and C Correct Answer Incorrect Answer

    Solution

    The CEO and board chairperson should be separate to prevent too much executive power. It has been mandated by SEBI on the recommendation of the Uday Kotak committee to separate the two posts. Currently this has been mandated for top 500 listed companies with effect from April 01, 2020.   The proportion of independent Board members is recommended to be increased to 50% of the Board strength as against 33% earlier.

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