ACCA SP Corporate Governance

Question 1

According to the UK Corporate Governance Code, what approach must listed companies take if they do not comply with a specific provision?

Accepted Answer

They must explain their reasons for non-compliance

Answer

They must obtain shareholder approval for non-compliance

Answer

They must apply for an exemption from the FRC

Answer

They must implement the provision within 12 months

Question 2

Which theory identifies the conflict of interest that arises when managers may prioritise their own interests over those of shareholders?

Accepted Answer

Agency theory

Answer

Stewardship theory

Answer

Stakeholder theory

Answer

Transaction cost theory

Question 3

Under the UK Corporate Governance Code, after how many years of service is a non-executive director generally no longer considered independent?

Accepted Answer

9 years

Answer

6 years

Answer

12 years

Answer

15 years

Question 4

Which board committee is primarily responsible for reviewing the company's financial reporting processes and the effectiveness of internal controls?

Accepted Answer

Audit committee

Answer

Nomination committee

Answer

Remuneration committee

Answer

Risk committee

Question 5

In a unitary board structure, which of the following best describes the board's composition?

Accepted Answer

Both executive and non-executive directors serving on a single board

Answer

Executive directors only, with a separate supervisory board providing oversight

Answer

Non-executive directors only, with a separate management board for executives

Answer

Independent directors elected solely by minority shareholders

Question 6

Which UK code sets out responsibilities for institutional investors to monitor and engage with their investee companies to promote long-term value?

Accepted Answer

The UK Stewardship Code

Answer

The Companies Act 2006

Answer

The Listing Rules

Answer

The OECD Principles of Corporate Governance

Question 7

According to the UK Corporate Governance Code, why should the roles of Chief Executive Officer and Chairman not be held by the same individual?

Accepted Answer

To maintain appropriate separation of management and governance leadership

Answer

To reduce the total salary cost to the company

Answer

To comply with EU corporate law directives

Answer

To ensure at least two people attend board meetings