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ACCA Corporate Governance Flashcards

6 cards from real ACCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Which US legislation was enacted in response to major corporate governance scandals such as Enron and WorldCom?

    Answer: Sarbanes-Oxley Act

    The Sarbanes-Oxley Act (SOX) of 2002 was passed to strengthen corporate governance, improve financial disclosures, and combat corporate fraud.

  2. What is the concept of 'enlightened shareholder value' in corporate governance?

    Answer: Considering the long-term interests of shareholders while accounting for stakeholder impacts

    Enlightened shareholder value recognizes that sustainable shareholder returns require directors to consider the interests of employees, customers, and wider stakeholders.

  3. In the context of ACCA corporate governance, what does 'ESG' stand for?

    Answer: Environmental, Social and Governance

    ESG refers to Environmental, Social, and Governance factors used by investors and regulators to evaluate a company's sustainability and ethical impact.

  4. What is the primary difference between a 'two-tier' board structure and a 'unitary' board structure?

    Answer: Two-tier boards separate supervisory and management boards into distinct bodies

    A two-tier structure separates the supervisory board (governance oversight) from the management board (operations), common in Germany and the Netherlands.

  5. Which of the following best describes 'integrated reporting' as promoted by the IIRC?

    Answer: Combining financial and non-financial information to show value creation over time

    Integrated reporting, as defined by the IIRC, combines financial and non-financial information to provide a holistic picture of how an organization creates value over time.

  6. What is 'board diversity' most commonly referring to in corporate governance best practice?

    Answer: Ensuring a mix of skills, experience, gender, and backgrounds on the board

    Board diversity in governance best practice refers to a broad mix including gender, skills, ethnicity, experience, and age to improve decision-making quality.