Corporate Governance Board of Directors & Committees 3

Question 1

What is 'board refreshment' in corporate governance?

Accepted Answer

The process of adding new directors to bring in fresh perspectives and skills

Answer

Updating the board's technology tools

Answer

Retraining existing directors on ESG topics

Answer

Increasing the board's compensation to retain talent

Question 2

Which law requires that public company audit committees be directly responsible for hiring the external auditor?

Accepted Answer

Sarbanes-Oxley Act

Answer

Dodd-Frank Act

Answer

Securities Exchange Act of 1934

Answer

Securities Act of 1933

Question 3

What is a 'poison pill' (shareholder rights plan) designed to do?

Accepted Answer

Deter hostile takeovers by diluting an acquirer's stake

Answer

Reduce the company's debt load quickly

Answer

Require supermajority approval for major transactions

Answer

Give the board authority to cancel outstanding shares

Question 4

What does 'director independence' primarily mean in US corporate governance?

Accepted Answer

The director has no material relationship with the company that could impair objectivity

Answer

The director owns at least 1% of company shares

Answer

The director was elected without management involvement

Answer

The director has expertise in a field unrelated to the company's industry

Question 5

Which governance practice involves a periodic review of the board's own performance?

Accepted Answer

Board self-assessment

Answer

Governance benchmarking

Answer

Director peer review

Answer

Proxy advisory analysis

Question 6

What is the primary concern when the CEO also serves as the Board Chair?

Accepted Answer

Lack of independent oversight of management

Answer

Reduced executive compensation oversight

Answer

Inability to form an audit committee

Answer

Violation of SEC registration requirements