Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What feature signifies good corporate governance?

1. Lack of transparency in decision-making

2. Integration of ethical considerations in business strategies

3. Absence of stakeholder feedback

4. Concentration of power among top executives

The correct answer is: Integration of ethical considerations in business strategies

The feature that signifies good corporate governance is the integration of ethical considerations in business strategies. Good corporate governance emphasizes accountability, transparency, and ethical behavior in the operations of a company. When a business incorporates ethical considerations into its strategies, it demonstrates a commitment to responsible practices that benefit not only the organization but also its stakeholders, including employees, customers, suppliers, and the community. This integration fosters trust and loyalty among stakeholders, enhances the company’s reputation, and mitigates risks associated with unethical behavior, such as fraud or mismanagement. In today’s corporate environment, where consumers and investors are increasingly aware of social responsibility, the incorporation of ethical considerations is essential for long-term success and sustainability. The other options reflect characteristics that are contrary to the principles of good governance. Lack of transparency, absence of stakeholder feedback, and concentration of power among top executives indicate weaknesses in governance structures and practices, which can lead to issues such as corruption, decreased accountability, and a disconnect from the needs and interests of various stakeholders.