Which of the following is NOT one of the core principles of sound corporate governance?

Which of the following is NOT one of the core principles of sound corporate governance?

• A. Accountability
• B. Profitability
• C. Transparency
• D. Fairness

Answer: (B)

Profitability is not considered one of the core principles of sound corporate governance. The focus of corporate governance revolves around ensuring that a company is managed in a way that promotes accountability, transparency, and fairness among its stakeholders, including shareholders, management, customers, suppliers, and the community. The principle of accountability ensures that those in leadership positions are held responsible for their actions and decisions and that there is a clear reason for the allocation of power within the organization. Transparency involves making information accessible and understandable to stakeholders, which helps build trust and enables informed decision-making. Fairness emphasizes equitable treatment of all stakeholders, ensuring that everyone's rights are protected relatively. While profitability is important for a company's success, it is more of an outcome of good governance practices rather than a governing principle itself. Healthy corporate governance systems are expected to promote sustainable profits, but profitability alone does not ensure that governance principles are being upheld. Thus, it does not qualify as a core principle of sound corporate governance.

Profitability is not considered one of the core principles of sound corporate governance. The focus of corporate governance revolves around ensuring that a company is managed in a way that promotes accountability, transparency, and fairness among its stakeholders, including shareholders, management, customers, suppliers, and the community.

The principle of accountability ensures that those in leadership positions are held responsible for their actions and decisions and that there is a clear reason for the allocation of power within the organization. Transparency involves making information accessible and understandable to stakeholders, which helps build trust and enables informed decision-making. Fairness emphasizes equitable treatment of all stakeholders, ensuring that everyone's rights are protected relatively.

While profitability is important for a company's success, it is more of an outcome of good governance practices rather than a governing principle itself. Healthy corporate governance systems are expected to promote sustainable profits, but profitability alone does not ensure that governance principles are being upheld. Thus, it does not qualify as a core principle of sound corporate governance.