CFO Corporate Governance & Compliance Flashcards

What is the Foreign Corrupt Practices Act (FCPA) primarily concerned with?

Answer: Prohibiting bribery of foreign government officials by U.S. companies

The FCPA prohibits U.S. companies and individuals from bribing foreign government officials to obtain or retain business.

What is the purpose of a whistleblower policy in a publicly traded company?

Answer: To provide a confidential channel for employees to report suspected fraud or violations without retaliation

Whistleblower policies protect employees who report financial fraud, SOX violations, or other misconduct, and are required by SOX for listed companies.

Which type of corporate governance document outlines the rights, responsibilities, and rules for conducting board meetings?

Answer: Corporate bylaws

Corporate bylaws govern the internal management of the company, including the conduct of board meetings, officer roles, and shareholder rights.

What is 'Regulation FD' (Fair Disclosure) and how does it affect CFOs?

Answer: An SEC rule prohibiting selective disclosure of material nonpublic information to certain investors

Regulation FD requires that when a company discloses material nonpublic information to certain market participants, it must simultaneously or promptly disclose it to the public.

What is the primary purpose of a proxy statement (Form DEF 14A) filed by a public company?

Answer: To provide shareholders with information needed to vote at the annual meeting, including executive compensation

A proxy statement gives shareholders information about agenda items at the annual meeting, including director elections, executive pay, and auditor ratification.

Under the Dodd-Frank Act, which type of executive pay vote must most public companies hold at least every three years?

Answer: Say-on-pay vote

Dodd-Frank requires public companies to hold non-binding 'say-on-pay' votes allowing shareholders to approve or reject executive compensation packages.