Final answer:
Corporate governance can benefit organizations of any size, not just large corporations. The board of directors, auditing firms, and large investors are key elements of corporate governance but their effectiveness depends on the integrity and rigor of the practices implemented.
Step-by-step explanation:
The correct statement regarding corporate governance is:
corporate governance can benefit organizations of any size. Small organizations are not exempt from the need for corporate governance mechanisms. While not all companies are legally required to have a board of directors, it is a common feature of corporate governance that provides oversight for top executives. In theory, the board of directors, elected by shareholders, should serve as the primary mechanism for overseeing the management of a company, ensuring it operates in the shareholders' interests.
Corporate governance practices are intended to align the interests of top executives with those of the shareholders. However, executives often have significant influence in selecting board members, which can lead to conflicts of interest and a lack of robust oversight. Therefore, it's not that large companies are inherently better at monitoring governance, but the structures for governance should be rigorously applied and monitored for their effectiveness across all companies, regardless of size.