Corporate Governance and Board Relations Flashcards
6 cards from real CCO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Corporate Governance and Board Relations flashcards as text
What information should a CCO regularly report to the Board or Audit Committee?
Answer: Program effectiveness metrics, investigation outcomes, regulatory developments, and emerging risks
Board reporting should cover the health of the compliance program, key metrics, investigation results, regulatory landscape, and significant risk areas.
What is the 'three lines of defense' model in governance?
Answer: A governance framework where business units (1st), compliance/risk (2nd), and internal audit (3rd) each provide distinct levels of risk management
The three lines model assigns risk management roles to operational management, risk/compliance oversight functions, and independent audit assurance, each playing distinct roles.
What is 'say on pay' in corporate governance?
Answer: A shareholder advisory vote on executive compensation packages
'Say on pay' gives shareholders a non-binding advisory vote on senior executive compensation, enhancing transparency and accountability.
What is dual-hatting in the context of compliance and legal functions?
Answer: When the CCO also serves as General Counsel, potentially creating conflicts between legal privilege and compliance transparency
Dual-hatting the CCO and GC roles can create tension between attorney-client privilege, which favors confidentiality, and compliance obligations, which favor transparency.
What is a charter for a compliance committee?
Answer: A formal document that establishes the committee's purpose, authority, composition, and responsibilities
The committee charter defines its mandate, membership, meeting frequency, reporting lines, and scope of authority, providing a governance framework for its operations.
What is 'fiduciary duty' for corporate directors?
Answer: Legal obligations requiring directors to act in the best interests of the corporation and its shareholders, including duties of care and loyalty
Directors owe the corporation duties of care (informed, deliberate decisions) and loyalty (putting corporate interests above personal interests).