ACCA Strategic Business Reporting (SBR) Practice Exam

What is one of the key characteristics of a joint control arrangement?

1. A single party makes all critical decisions

2. Control is purely based on majority voting

3. Decisions require unanimous consent of all parties

4. Decisions can be overridden by any party

The correct answer is: Decisions require unanimous consent of all parties

A key characteristic of a joint control arrangement is that decisions require unanimous consent of all parties involved. This means that all parties must agree on key decisions relating to the operation and direction of the arrangement, ensuring that no single entity can unilaterally make significant decisions that could affect the arrangement's outcomes. This characteristic reflects the collaborative nature of joint control, where all parties share authority and responsibility, promoting cooperation and consensus among the participants. This unanimity requirement supports the concept of joint ventures or partnerships, where parties aim for shared goals and outcomes, requiring that strategic decisions are made collectively. It highlights the necessity for mutual agreement in governance, aligning interests and strategies of all controlling parties to ensure that they work effectively towards common objectives.