Which of the following is not a mandatory component of corporate governance?

In the context of corporate governance, mandatory components are often dictated by legal frameworks and regulations that organizations must adhere to in order to ensure transparency, accountability, and oversight. Regulatory compliance is essential, as organizations must follow laws such as the Sarbanes-Oxley Act, which emphasizes financial disclosures and internal controls. Directors' competencies are also a critical aspect, as the efficacy of a board of directors in guiding a corporation’s strategy and operations hinges on their knowledge and expertise. Shareholder engagement is increasingly prioritized in governance practices, reflecting the need to consider shareholders' interests and allowing for their input in decision-making.

While codes of conduct are important and can enhance a company’s ethical standards and promote a culture of compliance, they are not universally mandated by law as the other components are. Different organizations may choose to implement a code of conduct based on their own values and business practices, but the law does not require it. Therefore, codes of conduct represent a more flexible approach to governance that varies across different corporations, thus making them less of a mandatory requirement compared to the other components listed.