CEA Corporate Governance & Compliance 4

Question 1

Which of the following is an example of a 'tone at the top' failure in corporate governance?

Accepted Answer

Senior executives publicly dismiss ethics policies as unnecessary bureaucracy

Answer

When senior leaders undermine or dismiss ethics policies, it signals to employees that compliance is not truly valued, eroding the ethical culture from the top down.

Question 2

What is the purpose of a 'conflict of interest' disclosure policy?

Accepted Answer

To identify situations where personal interests may improperly influence business decisions

Answer

Conflict of interest disclosure policies require employees and directors to reveal personal relationships or financial interests that could bias their professional decisions.

Question 3

Under NYSE listing standards, which committee must be composed entirely of independent directors?

Accepted Answer

Audit Committee

Answer

NYSE listing standards require the Audit Committee to be composed entirely of independent directors to ensure unbiased financial oversight.

Question 4

A compliance training program is MOST likely to change employee behavior when it:

Accepted Answer

Uses scenario-based learning tied to real workplace situations

Answer

Scenario-based training that mirrors real workplace dilemmas helps employees recognize and respond to ethical issues they are likely to encounter.

Question 5

What is the significance of the 'business judgment rule' in corporate governance?

Accepted Answer

It protects directors from liability for informed, good-faith business decisions

Answer

The business judgment rule is a legal presumption that protects directors from personal liability when they make informed, disinterested decisions in good faith for the benefit of the corporation.

(CEA) Certified Ethics Associate Practice Test

(CEA) Certified Ethics Associate Practice Test

CEA Corporate Governance & Compliance 4