Financial Risk Manager Part 1

Explanation

The correct answer is D because this statement describes a poor corporate governance practice, not a best practice.

Why Option D is Incorrect:

• Separation of Roles: The CEO and Chairman roles should be separate to maintain checks and balances
• Conflict of Interest: Having the same person in both positions creates concentration of power
• Lack of Objectivity: The CEO-Chairman may prioritize personal interests over shareholder interests
• Best Practice: Independent oversight requires different individuals in these roles

Why Other Options Are Correct Practices:

• Option A: Majority independent board members provide unbiased oversight
• Option B: Training directors from outside industries ensures informed decision-making
• Option C: Considering all stakeholder interests promotes comprehensive decision-making

This question tests understanding of corporate governance principles, specifically the importance of separating the CEO and Chairman roles to maintain proper oversight and prevent conflicts of interest.