Commercial Applications
A joint stock company faces criticism for holding back crucial financial information from its minority shareholders while making key decisions. What principle of corporate governance is being violated?
- Transparency and accountability
- Perpetual succession
- Limited liability
- Profit-sharing among shareholders
Joint Stock Company
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Answer
Transparency and accountability
Reason — When a company holds back crucial financial information from its minority shareholders, the principle of transparency and accountability is being violated. A company is required to disclose its results, follow all legal regulations, and its activities are subject to scrutiny by auditors and the government. Withholding important information from minority shareholders undermines their right to make informed decisions and erodes public confidence in the company.
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