Assertion (A) : Corporate behaviour towards stakeholders is an important concept in practice and a central part of corporate Governance. Reason (R) : It has to be ethical, legal and responsible behaviour for organisation, stakeholders and society. Code :
Both (A) and (R) are true.
Option 1 — Both (A) and (R) are true is correct.
Assertion (A) is true: how a corporation behaves towards its stakeholders — shareholders, employees, customers, suppliers, community and regulators — is indeed a central concern of corporate governance. Good governance is fundamentally about balancing and protecting the interests of these stakeholder groups.
Reason (R) is also true and it explains (A): corporate behaviour towards stakeholders is important precisely because it must be ethical, legal and responsible towards the organisation, its stakeholders and society at large. Ethical-legal-responsible conduct is exactly what makes stakeholder behaviour a governance issue, so R supports and explains A.
Why not the other options: Neither statement is false, so options 2 and 3 fail. Because R does correctly explain A, option 4 (which says R is not a correct explanation) is also ruled out — leaving Option 1.
Takeaway: Stakeholder-oriented, ethical and lawful conduct is the heart of corporate governance.
Similar Questions
Assertion (A) : Bad corporate governance can cast doubt on a company's reliability.
Reasoning (R) : Companies that do not cooperate sufficiently with auditors can publish non-compliant financial results.
Code :
Which among the following are also called Corporate Social Responsibility ?
(a) Corporate Conscience
(b) Corporate Citizenship
(c) Responsible Business
Code :
Which one among the following is not a part of Corporate Social Initiatives ?
Which of the following is/are the component(s) of Ethics by field of interest ?
What is the right sequence of four psychological sub-processes in ethical action given by James Rest ?
CSR is important because :
Which one of the following is not a principle of corporate Governance ?
Match the items given in the List - I and List - II and suggest the correct code :
List - I List - II (a) Ethics (i) Right code of behaviour for a group or profession (b) Morality (ii) Prescribes right conduct for everyone (c) Moral standard (iii) Needs some inclination to follow morality (d) Meta Moral Standard (iv) Practical and pragmatic Code :
Assertion (A) : When a corporation acts ethically and socially responsible in its business decisions and strategic planning, then the corporation will be more sustainable.
Reason (R) : Socially responsible corporate behaviour is increasingly seen as essential to long-term survival of companies.
Statement-I: Ethical principles tend to be broader than legal principles.
Statement-II: Laws and ethics are closely related.
Codes:
Important Questions from Corporate governance and business ethics
Corporations are controlled and directed by which one of the following?
Which among the following is not a correct statement with regard to Corporate Governance in India ?
As per the Anglo-Saxon Model of Corporate Governance, the authority lies with the following. Arrange these in decreasing order of authority.
A. Board of Directors
B. Managers
C. Shareholders
D. Employees (Company)
E. Trade unions
Choose the correct sequence from the options given below
Assertion (A) : Corporate governance is an important instrument of investor protection.
Reason (R) : Strong corporate governance is indispensable to resilient and vibrant capital markets.
Which one of the following options is correct?
Which one of the following is not a norm of corporate governance ?
