Correct Option (A)
The passage explicitly states that corporate governance involves "complying with all the laws of the land." Labour and tax laws constitute fundamental components of a country's legal framework. Therefore, adherence to these specific laws is directly aligned with the principles of good corporate governance as outlined in the passage, making Statement 1 correct.
Incorrect Options:
Statement 2 is incorrect. While the passage mentions the positive contribution of "an active group of independent directors on the board" towards ensuring market confidence, it does not advocate for or even suggest the inclusion of a "government representative" as an independent director to ensure transparency. This proposition is an extrapolation not supported by the provided text.
Statement 3 is incorrect. The passage highlights the principle that those in control must "distinguish between what are personal and corporate funds while managing a company." This emphasizes the clear segregation and identification of funds, rather than imposing a prohibition on managers from investing their personal funds in the company. The statement misinterprets the requirement for distinction as an absolute restriction on personal investment.