CED Professional Standards & Ethics 2

Question 1

A board member discovers that the executive director has been using organizational funds to pay for personal travel. What is the board's primary ethical obligation?

Accepted Answer

Investigate the allegation thoroughly and take corrective action

Answer

Boards have a fiduciary duty to investigate credible allegations of financial misconduct and take appropriate corrective action.

Question 2

Which principle best describes an executive director's obligation to disclose personal relationships with vendors seeking contracts?

Accepted Answer

Duty of loyalty

Answer

The duty of loyalty requires leaders to put the organization's interests ahead of personal gain, which includes disclosing conflicts of interest.

Question 3

An ED receives a substantial gift from a major donor after a successful fundraising campaign. What is the ethically appropriate response?

Accepted Answer

Decline or disclose it according to the organization's gift acceptance policy

Answer

EDs must follow the organization's gift acceptance policy, which typically requires declining or disclosing gifts above a threshold to avoid conflicts of interest.

Question 4

A nonprofit executive learns that a program officer at a major funding foundation is also a board member at a competitor organization. How should the ED handle grant communications?

Accepted Answer

Request the program officer recuse themselves from the review

Answer

Requesting recusal from a conflicted reviewer is the standard practice to protect the integrity of the grant process.

Question 5

What does the ethical concept of 'stewardship' primarily require of a Certified Executive Director?

Accepted Answer

Managing organizational resources responsibly on behalf of stakeholders

Answer

Stewardship means managing assets, funds, and resources entrusted to the organization responsibly and in alignment with its mission.

(CED) Certified Executive Director Practice Test

(CED) Certified Executive Director Practice Test

CED Professional Standards & Ethics 2