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Which of the following is true regarding the UK Corporate Governance Code: It is a code of best practice which sets out a number of key principles underpinning its approach. The Code is not fully backed by the London Stock Exchange. Publicly listed companies in the UK do not have to comply with the requirements of the Code. The Code is criticized for providing less transparency in corporate affairs, resulting in less information available to sharcholders.

Question

Which of the following is true regarding the UK Corporate Governance
Code:
It is a code of best practice which sets out a number of key principles
underpinning its approach.
The Code is not fully backed by the London Stock Exchange.
Publicly listed companies in the UK do not have to comply with the
requirements of the Code.
The Code is criticized for providing less transparency in corporate affairs,
resulting in less information available to sharcholders.

Which of the following is true regarding the UK Corporate Governance Code: It is a code of best practice which sets out a number of key principles underpinning its approach. The Code is not fully backed by the London Stock Exchange. Publicly listed companies in the UK do not have to comply with the requirements of the Code. The Code is criticized for providing less transparency in corporate affairs, resulting in less information available to sharcholders.

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RowanMaster · Tutor for 5 years

Answer

<p> A</p>

Explain

<p> This question asks the examinee to identify an accurate statement about the UK Corporate Governance Code. It provides four different statements about the Code, and the examinee needs to decide which of these is factually correct. Background knowledge about the Code would significantly aid selection of the correct answer. Let's evaluate the statements from academic viewpoints: <br /> 1. The UK Corporate Governance Code does provide a series of norms or "best practise" guidelines, especially in relation to the balance of responsibility in the business and having a clear purpose and strategy. This applies mostly to premium listed companies on the London Stock Exchange.<br /> 2. Little evidence supports the claim that London Stock Exchange doesn't fully embrace the Code. They actually promote it.<br /> 3. While not legally required, publicly listed companies in the UK are strongly encouraged to comply with the Code, adopting it as standard practise. Investors may see a company refusing to follow as a risky proposition.<br /> 4. On the point of transparency, the Code's founding purpose is the improvemnet of transparency in corporate operations, so criticism on the lack of transparency contradicts clearly known information regarding the Code's purpose.<br /></p>
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