Explanation:
The correct answer is D.
Best practices in corporate governance strongly advocate for the separation of the roles of Chief Executive Officer (CEO) and Chairman of the Board. This separation of power ensures that the board can maintain its independence and effectively oversee the executive management team. Having the CEO also serve as Chairman (CEO duality) concentrates too much power in one individual, which can lead to conflicts of interest and weakened board oversight. Thus, Choice D is not considered a best practice.
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Q.60 Muhammad Ismail, a research analyst, has recently learned in a seminar on the quality of research report writing that the firm's corporate governance is as important as the valuation of the firm's assets. He has noted the following points regarding the implication of good corporate governance. Which of them are not considered best practices of corporate governance?
A
The board of director should be comprised of a majority of independent members.
B
A director from outside of the industry should be provided training before joining the board.
C
The board will consider the interests of stakeholders, including debtholders, while taking decisions.
D
The CEO of the firm must also be the chairman of the board of directors in order to bring consistency in the board decisions.
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