CBS Corporate Governance & Ethics Flashcards

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

Answer: Dual leadership structure

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

A company's code of ethics primarily serves to:

Answer: Guide employee behavior and decision-making aligned with organizational values

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

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

Answer: Sarbanes-Oxley Act

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

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

Answer: The shareholders

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

A whistleblower policy in corporate governance is designed to:

Answer: Encourage reporting of unethical conduct without fear of retaliation

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

Which concept refers to a company's obligation to consider the interests of all stakeholders, not just shareholders?

Answer: Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) reflects a company's commitment to balancing the needs of all stakeholders including employees, communities, and the environment.