Corporate Governance Principles Flashcards
7 cards from real CBA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Corporate Governance Principles flashcards as text
Which governance document typically defines the scope of authority delegated from the board to senior management?
Answer: Delegation of Authority Matrix
A Delegation of Authority Matrix formally specifies which decisions management can make independently versus those requiring board approval.
Under U.S. banking regulations, the Federal Reserve's Regulation YY requires large bank holding companies to maintain which governance structure?
Answer: A Risk Committee of the board composed of independent members
Regulation YY mandates that covered bank holding companies establish a board-level Risk Committee with independent members.
A bank identifies that two of its board directors serve on the board of a major competitor. This situation primarily raises concerns about:
Answer: Conflicts of interest and potential breach of fiduciary duty
Serving on competitor boards creates conflicts of interest, risks disclosure of confidential information, and may breach fiduciary duties.
In corporate governance, the 'duty of loyalty' requires bank directors to:
Answer: Prioritize the interests of the bank over personal or third-party interests
The duty of loyalty requires directors to act in the best interests of the bank, avoiding self-dealing or conflicts of interest.
Which of the following is a key function of a bank's Nominations and Governance Committee?
Answer: Identifying and recommending candidates for board membership
The Nominations and Governance Committee oversees board composition, succession planning, and governance practices.
Board effectiveness evaluations in banks are conducted primarily to:
Answer: Identify gaps in board performance, composition, and skills
Board effectiveness evaluations help identify areas for improvement in how the board functions, its skillset, and its collective performance.
What does 'related-party transaction' mean in the context of bank governance?
Answer: A transaction between a bank and a closely affiliated entity such as a director, major shareholder, or their associates
Related-party transactions involve insiders or their affiliates, requiring heightened scrutiny to prevent self-dealing and conflicts of interest.