ACCA BT · Chapter 4 · Question 5 of 11
A 'comply or explain' approach to corporate governance is characteristic of which type of regime?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) A principles-based regime
Explanation
Under a principles-based approach, companies are expected to follow a code of best practice but may depart from a provision if they explain why. A rules-based regime requires mandatory compliance with detailed rules, with legal penalties for breach, and so does not permit an 'explain' alternative.
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