CEA Stakeholder Rights & Responsibilities 5

Question 1

A city government is a stakeholder in a private company's decision to relocate. The government's primary interest as a stakeholder is:

Accepted Answer

Protecting local employment, tax revenue, and community welfare

Answer

Local governments act as stakeholders to protect the economic and social interests of the communities they represent, not to gain ownership or control.

Question 2

Ethical obligations to customers under the CEA framework include all of the following EXCEPT:

Accepted Answer

Guaranteeing customer profitability on purchases

Answer

Companies owe customers accuracy, safety, and contract fulfillment — but cannot ethically guarantee profitability on purchases, which involves market risk.

Question 3

A company's responsibility to minority shareholders includes protecting them from:

Accepted Answer

Oppressive actions by majority shareholders that disregard minority interests

Answer

Minority shareholder protections guard against majority shareholder actions that unfairly exploit or ignore the legitimate interests of minority owners.

Question 4

Which action demonstrates a company's responsibility to the broader society as a stakeholder?

Accepted Answer

Contributing to public goods and minimizing negative externalities

Answer

Responsibility to society means contributing positively through taxes, public goods, and minimizing harms like pollution and social disruption.

Question 5

A director who learns of a material related-party transaction must disclose it to the board primarily because of which stakeholder duty?

Accepted Answer

Duty of loyalty to the corporation and its stakeholders

Answer

The duty of loyalty requires directors to disclose conflicts of interest so the board and stakeholders can make decisions free from undisclosed self-dealing.

(CEA) Certified Ethics Associate Practice Test

(CEA) Certified Ethics Associate Practice Test

CEA Stakeholder Rights & Responsibilities 5