Final answer:
Corporate governance is the process that addresses the needs of external stakeholders including stockholders, creditors, and government regulators, ensuring company accountability and financial transparency. The board of directors, auditing firms, and large shareholders play critical roles in this process.
Step-by-step explanation:
Corporate governance addresses the needs of external stakeholders, which include stockholders, creditors, and government regulators. The correct answer to the given question is d) Corporate governance. This aspect of business is critical for ensuring transparency and accountability within an organization.
The board of directors is the primary mechanism of corporate governance, tasked with oversight for top executives and protecting the interests of shareholders.
Furthermore, an auditing firm is also a key player in corporate governance; by reviewing financial records and ensuring their accuracy, audit firms play a crucial role in maintaining the trust of investors.
Lastly, outside investors, especially large shareholders such as mutual funds or pension funds, also influence corporate governance processes.
The case of Lehman Brothers exemplifies a failure in corporate governance where investors were misled about the firm's financial status, underscoring the vital role of governance in maintaining financial integrity and investor confidence.