CBS CBS Corporate Governance & Ethics 1

Question 1

Which governance model separates the roles of CEO and Board Chair to reduce conflicts of interest?

Accepted Answer

Dual leadership structure

Answer

A dual leadership structure separates the CEO and Board Chair roles to provide independent oversight and reduce conflicts of interest.

Question 2

A company's code of ethics primarily serves to:

Accepted Answer

Guide employee behavior and decision-making aligned with organizational values

Answer

A code of ethics provides a framework that guides employee behavior and ensures decisions align with the organization's core values.

Question 3

Which U.S. legislation significantly strengthened corporate governance requirements for publicly traded companies after major accounting scandals?

Accepted Answer

Sarbanes-Oxley Act

Answer

The Sarbanes-Oxley Act of 2002 was enacted in response to Enron and WorldCom scandals, mandating stricter financial disclosure and internal controls.

Question 4

In agency theory, who is the 'principal' in the relationship between shareholders and management?

Accepted Answer

The shareholders

Answer

In agency theory, shareholders are the principals who delegate authority to agents (managers) to act on their behalf.

Question 5

A whistleblower policy in corporate governance is designed to:

Accepted Answer

Encourage reporting of unethical conduct without fear of retaliation

Answer

Whistleblower policies protect and encourage employees to report unethical or illegal conduct without facing retaliation.

(CBS) Certified Business Strategist Practice Test