CBA Corporate Governance Principles 2

Question 1

Which committee is primarily responsible for overseeing a bank's financial reporting and internal controls?

Accepted Answer

Audit Committee

Answer

The Audit Committee is responsible for overseeing financial reporting integrity, internal controls, and external auditor relationships.

Question 2

Under the Basel Committee's corporate governance principles, the board of directors is responsible for:

Accepted Answer

Setting the bank's risk appetite and overseeing senior management

Answer

The Basel Committee assigns the board responsibility for setting risk appetite and providing effective oversight of senior management.

Question 3

What is 'say-on-pay' in the context of bank corporate governance?

Accepted Answer

A shareholder vote on executive compensation packages

Answer

Say-on-pay gives shareholders an advisory or binding vote on executive compensation, enhancing board accountability.

Question 4

A bank's whistleblower policy is best described as a governance mechanism that:

Accepted Answer

Provides channels for reporting misconduct without fear of retaliation

Answer

Effective whistleblower policies establish safe, confidential channels for reporting misconduct, a key element of a sound governance culture.

Question 5

Which of the following best describes a 'staggered board' structure?

Accepted Answer

Only a fraction of board seats are up for election each year

Answer

A staggered board divides directors into classes elected in different years, providing continuity but potentially entrenching existing directors.

(CBA) Certified Bank Auditor Practice Test