What are the core elements of a modern corporate governance framework?

• A. Board independence, audit committee, risk management oversight, executive compensation governance, internal controls, and robust disclosure.
• B. Only board independence and marketing strategy.
• C. Short-term profits and cost-cutting focus.
• D. Sole reliance on external stakeholders.

Answer: (A)

Modern corporate governance rests on establishing structures that ensure accountability, transparency, and sustainable value. The essential elements include board independence to provide objective oversight, an audit committee to supervise financial reporting and controls, risk management oversight to identify and manage threats, governance of executive compensation to align incentives with long-term performance, solid internal controls to prevent errors and fraud, and robust disclosure to keep investors and other stakeholders well informed. Together these parts create a system where decisions are checked by independent judgment, risks are managed, rewards align with performance, assets are protected, and information flows are transparent. The other options fall short because they emphasize elements outside governance structure, focus on short-term profit without safeguards, or rely solely on external stakeholders, leaving internal accountability and control mechanisms underemphasized.