Which of the following statements best reflects the logical inference from the passage given above?

1. A. It is an important agenda of the countries around the world to ensure access to good external financing.
2. B. Good corporate governance improves the credibility of the firms.
3. C. International capital markets ensure that the firms maintain good corporate governance.
4. D. Good corporate governance paves the way for robust supply chains.

Answer: B

Explanation

The passage states that ‘Good corporate governance structures encourage companies to provide accountability and control’ and that ‘Investors look to place their funds where the standards of disclosure, of timely and accurate financial reporting, and of equal treatment to all stakeholders are met.’ This directly implies that good corporate governance builds trust and confidence among investors by ensuring transparency and fair treatment. This trust and confidence are synonymous with improving the credibility of the firms, which in turn enhances their access to external financing. Options A and C misrepresent the cause-effect relationship or are secondary points. Option D is outside the scope of the passage.