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
Under OCC guidance, which of the following is considered a key attribute of an effective bank board?
Answer: Maintaining active oversight while respecting management's operational role
The OCC expects boards to provide active, informed oversight without crossing into management's operational domain.
A bank's governance framework should include a formal board succession plan primarily because:
Answer: Planned transitions ensure continuity of oversight expertise and reduce governance gaps
Board succession planning ensures that critical skills and experience are retained and governance continuity is maintained when directors retire or leave.
Which regulatory body published the 'Principles for Enhancing Corporate Governance' that are widely used as a global benchmark for banks?
Answer: Basel Committee on Banking Supervision (BCBS)
The Basel Committee on Banking Supervision published the Principles for Enhancing Corporate Governance, providing the primary global standard for bank boards.
A bank director who also owns a significant stake in a vendor seeking a major contract with the bank should:
Answer: Disclose the conflict and recuse themselves from related discussions and votes
Disclosure and recusal are the required responses to conflicts of interest to preserve the integrity of the board's decision-making.
Which of the following best describes the role of 'shadow directors' in bank governance risk?
Answer: Individuals who exercise board-level influence without formal appointment, potentially avoiding accountability
Shadow directors exert control over a bank without formal director status, creating accountability gaps and potential governance failures.
How does the concept of 'board information asymmetry' threaten effective bank governance?
Answer: Management controlling what information reaches the board can limit effective oversight
When management filters or selectively presents information to the board, directors cannot provide informed oversight or effective challenge.
Which of the following scenarios MOST represents a breakdown in the governance oversight of a bank's compliance function?
Answer: The Chief Compliance Officer reports solely to the CEO with no direct access to the board
When the CCO lacks direct board access and reports only to the CEO, management can suppress or filter compliance findings, undermining independent oversight.