Professional Ethics & Governance Flashcards
7 cards from real CME practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Ethics & Governance flashcards as text
A manager learns that a colleague is padding expense reports. The manager has no direct supervisory authority over the colleague. The MOST ethical action is to:
Answer: Report the suspected misconduct through the appropriate compliance or ethics channel
Reporting suspected misconduct through established channels is the expected ethical response regardless of direct supervisory authority.
The 'business judgment rule' protects directors from liability when they:
Answer: Make informed, good-faith decisions that are not tainted by self-interest
The business judgment rule shields directors who act in good faith, on an informed basis, and without personal financial interest in the outcome.
Which of the following is an example of a proactive ethics program element, as opposed to a reactive control?
Answer: Regular ethics training embedded in leadership development
Ethics training embedded in ongoing development builds values before violations occur, making it a proactive element rather than a reactive control.
Under the Foreign Corrupt Practices Act (FCPA), facilitation payments are:
Answer: Permitted for routine governmental actions but not for obtaining or retaining business
The FCPA contains a narrow exception allowing small facilitation payments to expedite routine non-discretionary government actions, though this exception is interpreted very strictly.
A board committee responsible for recommending executive pay structures is called the:
Answer: Compensation committee
The compensation committee (sometimes called the human capital committee) oversees executive pay design to align incentives with strategy and shareholder interests.
Which of the following BEST describes 'regulatory capture' as an ethics concern in governance?
Answer: Regulated industries exerting undue influence over the agencies meant to oversee them
Regulatory capture occurs when a regulatory body acts in the interest of the industry it is supposed to regulate rather than the public it is meant to protect.
When an organization publishes a code of ethics, the MOST critical factor determining its effectiveness is:
Answer: Consistent enforcement and visible leadership commitment to its principles
Codes of ethics are only effective when leadership visibly models the values and the organization consistently enforces consequences for violations.