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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

  1. What is the primary governance role of the Board of Directors regarding compliance?

    Answer: Setting the ethical tone, overseeing the compliance program, and holding management accountable

    The Board sets strategic direction and ethical culture, oversees the compliance program's effectiveness, and holds management accountable for its operation.

  2. What is the purpose of an Audit Committee in corporate governance?

    Answer: To oversee financial reporting, internal controls, risk management, and the internal audit function on behalf of the Board

    The Audit Committee provides Board-level oversight of financial integrity, internal controls, and the independence of both internal and external audit functions.

  3. What does the Sarbanes-Oxley Act (SOX) require of public company CEOs and CFOs?

    Answer: Personal certification of the accuracy of financial statements and the effectiveness of internal controls

    SOX Section 302 requires CEOs and CFOs to personally certify the accuracy of financial reports and the effectiveness of internal controls, creating personal accountability.

  4. What is an independent director in corporate governance?

    Answer: A board member who has no material relationship with the company that could influence their judgment

    Independent directors have no significant financial, familial, or other relationship with the company that could compromise their objectivity in board decisions.

  5. What is the 'business judgment rule' in corporate governance?

    Answer: A legal presumption that directors acted on an informed basis, in good faith, and in the honest belief that decisions were in the company's best interest

    The business judgment rule protects directors from liability for decisions made in good faith after reasonable deliberation, even if those decisions turn out poorly.

  6. What is a compliance committee at the board level?

    Answer: A board or management committee specifically tasked with overseeing the compliance program's design and effectiveness

    A board-level compliance committee provides dedicated oversight of the ethics and compliance program, separate from the Audit Committee's financial focus.