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Preliminary exam CSAT May 12,2024

1.Read the following passage and answer the items that follow each passage. Your answers to
these items should be based on the passages only.

Passage

Corporate governance is based on principles such as conducting the business with all integrity and
fairness, being transparent with regard to all transactions, making all the necessary disclosures and
decisions, complying with all the laws of the land, accountability and responsibility towards the
stakeholders and commitment to conducting business in an ethical manner. Another point which is
highlighted on corporate governance is the need for those in control to be able to distinguish
between what are personal and corporate funds while managing a company.
Fundamentally, there is a level of confidence that is associated with a company that is known to
have good corporate governance. The presence of an active group of independent directors on the
board contributes a great deal towards ensuring confidence in the market. Corporate governance is
known to be one of the criteria that foreign institutional investors are increasingly depending on
when deciding on which companies to invest in. It is also known to have a positive influence on the
share price of the company. Having a clean image on the corporate governance front could also
make it easier for companies to source capital at more reasonable costs. Unfortunately, corporate
governance often becomes the centre of discussion only after the exposure of a large scam.

According to the passage, which of the following should be the practice/practices in good
corporate governance?
1. Companies should always comply with labour and tax laws of the land.
2. Every company in the country should have a government 'representative as one of the
independent directors on the board to ensure transparency.
3. The manager of a company should never invest his personal, funds in the company.
Select the correct answer using the codes given below:

1 only 2 and 3 only 1 and 3 only 1, 2 and 3

General Studies

Political Science and International Relations

Sociology

Some Reference Essays

List of previous year essay topics (1997-2019)

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