Which of the following is NOT a factor that directors and management should consider when developing a corporate governance framework for an organization?
A.
The legal and regulatory environment in which the organization operates
B.
The ability of the framework to remain static during changes in the corporate landscape
A corporate governance framework must be dynamic, adapting to changes in regulations, markets, and corporate landscapes.
It must consider legal, ethical, cultural, and operational environments.
Why B is Incorrect:
A static framework cannot accommodate evolving business risks, regulatory changes, and cultural shifts, leading to governance failures. Flexibility is critical for sustainability and resilience.
References:
ACFE governance best practices and COSO framework guidance highlight the importance of adaptability in governance frameworks.
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