Practice Test Geeks(CCB) Certified Compliance and Business Specialist Practice Test
← All CCB Flashcard Decks

Business Ethics & Corporate Governance Flashcards

7 cards from real CCB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Business Ethics & Corporate Governance flashcards as text

  1. A board member discovers that a major supplier is violating environmental regulations but the violations reduce costs significantly. What is the most ethically sound course of action?

    Answer: Report the violations to regulators and end the supplier relationship

    Ethical corporate governance requires reporting legal violations and ceasing relationships with non-compliant suppliers, regardless of cost benefits.

  2. Which governance mechanism most directly aligns executive compensation with long-term shareholder value?

    Answer: Equity-based compensation with multi-year vesting schedules

    Equity compensation with vesting schedules incentivizes executives to focus on sustainable long-term performance rather than short-term gains.

  3. The 'say on pay' shareholder vote required under Dodd-Frank is best described as:

    Answer: An advisory vote allowing shareholders to express views on executive compensation

    Say on pay votes are advisory and non-binding, giving shareholders a voice on executive compensation packages without legal authority to override board decisions.

  4. A company's audit committee is considering hiring the CFO's former employer as the external auditor. Which ethical concern does this raise?

    Answer: Conflict of interest that compromises auditor independence

    Hiring an auditor connected to the CFO creates a conflict of interest that undermines the independence essential to objective financial oversight.

  5. Which ethical theory holds that the morality of an action is determined solely by its consequences and overall utility?

    Answer: Utilitarianism

    Utilitarianism judges actions based on their outcomes, specifically whether they maximize overall happiness or utility for the greatest number.

  6. A corporation's code of conduct prohibits accepting gifts over $50, but a sales executive receives a $200 gift card from a key client during a holiday. The best immediate action is:

    Answer: Report the gift to the compliance department and follow policy on returning or donating it

    Employees must report gifts that exceed policy thresholds and follow established procedures, even when intent appears innocent.

  7. The principle of 'tone at the top' in corporate governance refers to:

    Answer: Senior leadership modeling ethical behavior and setting the cultural standard for the organization

    Tone at the top means senior leaders demonstrate ethical conduct through their own behavior, which cascades through the organizational culture.