CCB Board Reporting & Governance 5

Question 1

A publicly traded company's board receives a compliance report flagging a potential FCPA violation overseas. What is the board's FIRST obligation?

Accepted Answer

Engage legal counsel and initiate an independent investigation

Answer

Upon receiving credible FCPA violation allegations, the board must promptly engage independent legal counsel to investigate before any other action.

Question 2

What is the role of a 'Governance, Risk, and Compliance (GRC)' platform in board reporting?

Accepted Answer

It centralizes and automates collection, reporting, and tracking of compliance and risk data for board visibility

Answer

GRC platforms consolidate compliance, risk, and audit data into dashboards that give the board a real-time, integrated view of the organization's risk posture.

Question 3

Which scenario demonstrates the board fulfilling its 'duty of loyalty'?

Accepted Answer

A director abstaining from a vote on a contract that benefits his own company

Answer

Abstaining from a vote where a conflict of interest exists demonstrates the duty of loyalty by prioritizing the company's interests over personal gain.

Question 4

A board is evaluating its own governance practices. What is this process called?

Accepted Answer

Board self-assessment or board evaluation

Answer

Board self-assessment is a periodic process where directors evaluate the effectiveness of the board's structure, processes, and individual contributions.

Question 5

In a compliance report to the board, 'key risk indicators (KRIs)' differ from 'key performance indicators (KPIs)' in that KRIs:

Accepted Answer

Signal early warning signs of increasing risk exposure

Answer

KRIs are forward-looking metrics that indicate rising risk levels before a compliance failure occurs, unlike KPIs which measure past performance.

(CCB) Certified Compliance and Business Specialist Practice Test

(CCB) Certified Compliance and Business Specialist Practice Test

CCB Board Reporting & Governance 5