Business Office Specialist Test 2025 – 400 Free Practice Questions to Pass the Exam

Corporate governance refers to the framework of rules, practices, and processes that dictate how a company is directed and controlled. It involves the mechanisms through which stakeholders, such as the board of directors, management, shareholders, and other parties interact to achieve organizational goals and ensure accountability.

By establishing a system of rules and processes, corporate governance seeks to balance the interests of various stakeholders while promoting transparency and ethical behavior within the organization. It encompasses aspects such as decision-making, risk management, and compliance with laws and regulations, which are essential for maintaining trust and integrity in business operations.

In contrast to the other options, which focus on specific operational aspects of a business, corporate governance provides the overarching structure that guides these activities. Employee performance management, financial auditing practices, and marketing strategies all operate within the framework of corporate governance, but they do not define its scope.