CBS CBS Corporate Governance & Ethics 3

Question 1

A conflict of interest in corporate governance arises when:

Accepted Answer

A director's personal interests could compromise their duty to the company

Answer

A conflict of interest occurs when a director's personal, financial, or professional interests could bias their decision-making at the expense of the company.

Question 2

Say-on-pay policies in U.S. corporate governance give shareholders the right to:

Accepted Answer

Vote on executive compensation packages (advisory)

Answer

Say-on-pay gives shareholders a non-binding advisory vote on executive compensation, increasing accountability for pay decisions.

Question 3

Which governance practice ensures that no single individual has control over all key financial decisions?

Accepted Answer

Separation of duties

Answer

Separation of duties divides critical financial tasks among multiple people to prevent errors, fraud, and abuse of power.

Question 4

Stakeholder theory, as opposed to shareholder theory, argues that corporations should:

Accepted Answer

Balance the interests of employees, customers, communities, and shareholders

Answer

Stakeholder theory holds that businesses create long-term value by considering and balancing the needs of all parties affected by their operations.

Question 5

An ethics hotline (helpline) in a corporation is primarily used to:

Accepted Answer

Allow anonymous reporting of potential ethical violations

Answer

An ethics hotline provides a confidential channel for employees to report suspected misconduct or ethical violations anonymously.

(CBS) Certified Business Strategist Practice Test

(CBS) Certified Business Strategist Practice Test

CBS CBS Corporate Governance & Ethics 3