Stakeholder Rights & Responsibilities Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Stakeholder Rights & Responsibilities flashcards as text
A city government is a stakeholder in a private company's decision to relocate. The government's primary interest as a stakeholder is:
Answer: Protecting local employment, tax revenue, and community welfare
Local governments act as stakeholders to protect the economic and social interests of the communities they represent, not to gain ownership or control.
Ethical obligations to customers under the CEA framework include all of the following EXCEPT:
Answer: Guaranteeing customer profitability on purchases
Companies owe customers accuracy, safety, and contract fulfillment — but cannot ethically guarantee profitability on purchases, which involves market risk.
A company's responsibility to minority shareholders includes protecting them from:
Answer: Oppressive actions by majority shareholders that disregard minority interests
Minority shareholder protections guard against majority shareholder actions that unfairly exploit or ignore the legitimate interests of minority owners.
Which action demonstrates a company's responsibility to the broader society as a stakeholder?
Answer: Contributing to public goods and minimizing negative externalities
Responsibility to society means contributing positively through taxes, public goods, and minimizing harms like pollution and social disruption.
A director who learns of a material related-party transaction must disclose it to the board primarily because of which stakeholder duty?
Answer: Duty of loyalty to the corporation and its stakeholders
The duty of loyalty requires directors to disclose conflicts of interest so the board and stakeholders can make decisions free from undisclosed self-dealing.
Which of the following best illustrates the stakeholder responsibility of reciprocity?
Answer: A company and its employees mutually invest in each other's long-term well-being
Reciprocity in stakeholder relationships involves mutual obligations — both parties investing in the relationship's long-term health, not transactional exchanges.
When competing stakeholder interests cannot all be fully satisfied, the ethical approach is to:
Answer: Prioritize interests that protect fundamental rights and minimize serious harm first
Ethical priority-setting in stakeholder conflicts places fundamental rights and serious harm prevention above less urgent competing interests.