ACCA BT · Chapter 4 · Question 4 of 11
Why is it generally recommended that the roles of chairman and chief executive officer be held by different individuals?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) To avoid too much power being concentrated in one person
Explanation
Separating the roles means the chairman can run the board and hold the executive team to account, while the chief executive runs the business. Combining them would concentrate unchecked power in one individual. The separation is not about cost, the CEO is an executive director, and it has no effect on the number of shareholders.
More Corporate governance and social responsibility MCQs
- Q6Which of the following would most clearly threaten the independence of a non-executive director?
- Q7Carroll's pyramid of corporate social responsibility identifies four levels. Which level forms the base of the pyramid?
- Q8A company voluntarily funds a scholarship scheme for students from deprived areas, even though it has no legal obligation to do so and…
- Q9Which view of corporate social responsibility argues that the only social responsibility of a business is to maximise profits for its…
- Q10A listed company's remuneration committee is designing an incentive scheme for executive directors. Which feature would best align…