CCB Business Ethics & Corporate Governance 3

Question 1

A company's board has 10 members, 9 of whom are former colleagues of the CEO. This structure primarily raises concerns about:

Accepted Answer

Lack of board independence and potential rubber-stamping of management decisions

Answer

A board dominated by insiders or associates of the CEO lacks independence, undermining its ability to provide objective oversight of management.

Question 2

Under the Foreign Corrupt Practices Act (FCPA), which of the following is explicitly prohibited?

Accepted Answer

Paying a foreign official to expedite a routine government action

Answer

The FCPA prohibits bribing foreign government officials, including facilitation payments to expedite routine actions like permits or customs clearance.

Question 3

Which of the following best describes 'stakeholder theory' in business ethics?

Accepted Answer

Companies must balance the interests of all parties affected by their actions, not just shareholders

Answer

Stakeholder theory, associated with R. Edward Freeman, argues corporations must consider employees, customers, communities, and other affected parties—not just shareholders.

Question 4

A whistleblower reports financial fraud internally but the company retaliates by terminating their employment. Under Dodd-Frank, the whistleblower may:

Accepted Answer

File a retaliation complaint with the SEC and seek reinstatement and back pay

Answer

Dodd-Frank provides strong anti-retaliation protections for SEC whistleblowers, including the right to file complaints and receive reinstatement and financial remedies.

Question 5

The concept of 'materiality' in corporate disclosure ethics means:

Accepted Answer

Only information that a reasonable investor would consider important in making decisions must be disclosed

Answer

Material information is information a reasonable investor would likely consider important when making investment decisions, and must be timely disclosed.

(CCB) Certified Compliance and Business Specialist Practice Test

(CCB) Certified Compliance and Business Specialist Practice Test

CCB Business Ethics & Corporate Governance 3