Practice Test Geeks(CEP) Certified Environmental, Social, and Governance (ESG) Planner Practice Test
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Governance Structures & Ethical Practices Flashcards

7 cards from real CEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. What is 'say on pay' in the context of corporate governance?

    Answer: A shareholder vote on executive compensation packages

    'Say on pay' is a shareholder advisory vote that allows investors to approve or reject a company's executive compensation program.

  2. Which ethical framework emphasizes that decisions should be made based on universal rules applicable to everyone, regardless of outcomes?

    Answer: Kantian deontology

    Kantian deontology holds that actions must follow universal moral rules (categorical imperatives) regardless of their consequences.

  3. A company discovers its supplier uses child labor. Under the UN Guiding Principles, what is the company's first obligation?

    Answer: Conduct human rights due diligence and work to remediate the harm

    The UNGPs require companies to conduct due diligence and remediate adverse human rights impacts, which may involve working with suppliers rather than immediate termination.

  4. What does 'dual-class share structure' mean in governance terms?

    Answer: Different share classes carry different voting rights, often concentrating control with founders

    Dual-class share structures give certain shareholders (usually founders) superior voting rights, concentrating governance control despite having fewer economic shares.

  5. Which organization publishes the OECD Principles of Corporate Governance used internationally as a benchmark?

    Answer: Organisation for Economic Co-operation and Development

    The OECD publishes its Principles of Corporate Governance, which serve as an international standard referenced by regulators and companies worldwide.

  6. In ESG governance, what is an 'independent director'?

    Answer: A director who has no material relationship with the company that could impair objectivity

    An independent director has no material financial, personal, or professional relationship with the company that could compromise their objective judgment.

  7. What governance red flag does excessive related-party transactions typically signal?

    Answer: Potential conflicts of interest and self-dealing

    Excessive related-party transactions often indicate conflicts of interest where insiders benefit personally at the expense of other shareholders.