Heads-Up19: corporate governance

Statement 1: Although the results are inconclusive in emerging markets, companies in developed countries that have strong corporate governance systems have provided shareholders with higher returns than companies with weak governance system.

Statement 2: A weak corporate governance system can cause a company to go bankrupt.

both correct

I saw this question before. Is it schweser?

Anyway, I think answer should be 1 is incorrect and 2 is correct. Regardless of emerging or developed markets, strong corporate governance system will provide greater returns for shareholders.

i think both are correct, just because there hasn’t been enough research done in emerging markets.

the tricky one is the first, but it seems that corp gov is good for all!

so both are correct?

1 is wrong.

yeah just checked curriculum. they mention a malaysian study, so applies to emerging markets as well.

In Emerging markets the debt would probably be high yield & special care must be given to corporate governance I think. A does not seem correct. Results should not be inconclusive rather have a strong correlation…