CCO Corporate Governance and Board Relations 2

Question 1

What information should a CCO regularly report to the Board or Audit Committee?

Accepted Answer

Program effectiveness metrics, investigation outcomes, regulatory developments, and emerging risks

Answer

Board reporting should cover the health of the compliance program, key metrics, investigation results, regulatory landscape, and significant risk areas.

Question 2

What is the 'three lines of defense' model in governance?

Accepted Answer

A governance framework where business units (1st), compliance/risk (2nd), and internal audit (3rd) each provide distinct levels of risk management

Answer

The three lines model assigns risk management roles to operational management, risk/compliance oversight functions, and independent audit assurance, each playing distinct roles.

Question 3

What is 'say on pay' in corporate governance?

Accepted Answer

A shareholder advisory vote on executive compensation packages

Answer

'Say on pay' gives shareholders a non-binding advisory vote on senior executive compensation, enhancing transparency and accountability.

Question 4

What is dual-hatting in the context of compliance and legal functions?

Accepted Answer

When the CCO also serves as General Counsel, potentially creating conflicts between legal privilege and compliance transparency

Answer

Dual-hatting the CCO and GC roles can create tension between attorney-client privilege, which favors confidentiality, and compliance obligations, which favor transparency.

Question 5

What is a charter for a compliance committee?

Accepted Answer

A formal document that establishes the committee's purpose, authority, composition, and responsibilities

Answer

The committee charter defines its mandate, membership, meeting frequency, reporting lines, and scope of authority, providing a governance framework for its operations.

CCO - Chief Compliance Officer Practice Test

CCO - Chief Compliance Officer Practice Test

CCO Corporate Governance and Board Relations 2