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
Corporate social responsibility (CSR) initiatives are BEST justified from a governance perspective when they:
Answer: Create long-term value for the company while benefiting stakeholders
Effective CSR aligns business strategy with stakeholder benefit, creating sustainable competitive advantages and reputational value.
A publicly traded company's CEO trades company stock one day before the firm announces a major acquisition. This behavior is best characterized as:
Answer: Insider trading, which violates securities law and ethical standards
Trading on material non-public information, such as an unannounced acquisition, constitutes insider trading and violates both securities law and fiduciary duty.
Which of the following is a characteristic of a strong ethical organizational culture?
Answer: Ethical behavior is formally incentivized and violations are consistently punished
A strong ethical culture reinforces desired behavior through positive incentives and consistent consequences for violations.
The 'business judgment rule' primarily protects directors who:
Answer: Make decisions that result in financial losses despite acting in good faith and on an informed basis
The business judgment rule shields directors from liability for losses if they acted in good faith, on an informed basis, and in the honest belief that the action was in the company's best interest.
A company operating in a country with no anti-corruption laws bribes local officials to win a government contract. From an ethical standpoint:
Answer: The bribery is unethical because ethical standards transcend local legal requirements
Ethical conduct is not defined solely by local law; universal ethical principles and home-country laws like the FCPA apply even where local laws are absent.
Which of the following is the PRIMARY purpose of separating the roles of CEO and board chair?
Answer: To ensure independent oversight of management by the board
Separating CEO and chair roles prevents concentration of power and ensures the board can independently evaluate and oversee management.
Environmental, Social, and Governance (ESG) reporting is primarily designed to:
Answer: Provide stakeholders with transparent information on non-financial performance factors
ESG reporting communicates a company's performance across environmental, social, and governance dimensions to help stakeholders assess risk and long-term sustainability.