Accounting Multiple Choice Question – 12 May 2025

The stewardship approach to corporate governance requires directors of limited companies?

Select ONE answer:

1. To always act in the best interests of the company
2. To allow shareholders to see detailed accounting records upon request
3. To hold regular monthly meetings to answer shareholders’ questions
4. To consult the shareholders over difficult management decisions

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > The stewardship approach requires that directors should always act in the company’s best interests, not in their own. This is a resolution of the agency problem. Allowing shareholders to see detailed accounting records on request, holding monthly meetings to answer shareholders’ queries and consulting shareholders over difficult management decisions are not factors that are required by the stewardship approach, though a company can choose to enforce such procedures if it wants.
2. Not correct
3. Not correct
4. Not correct

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