Corporate Governance And Ethics 3

Question 1

Under the Foreign Corrupt Practices Act (FCPA), US companies are prohibited from:

Accepted Answer

Bribing foreign government officials to obtain or retain business

Answer

The FCPA prohibits US issuers and domestic concerns from paying bribes to foreign officials for the purpose of obtaining or retaining business.

Question 2

The concept of 'tone at the top' in corporate ethics refers to:

Accepted Answer

Senior leadership's role in modeling and reinforcing ethical behavior throughout the organization

Answer

Tone at the top describes how senior leaders' behavior and public commitments to ethics shape the ethical culture of the entire organization.

Question 3

A director who has a material financial interest in a contract being considered by the board should MOST appropriately:

Accepted Answer

Recuse themselves from the vote and disclose the conflict

Answer

Directors with conflicts of interest must disclose them and recuse themselves from related votes to protect the integrity of the board decision.

Question 4

Which of the following is a PRIMARY function of an independent audit committee?

Accepted Answer

Overseeing financial reporting, internal controls, and the external audit process

Answer

The audit committee oversees financial reporting integrity, internal controls, and the relationship with external auditors to protect shareholders.

Question 5

ESG ratings that differ significantly across rating agencies MOST likely indicate:

Accepted Answer

Lack of standardized metrics and methodologies across the ESG rating industry

Answer

ESG rating divergence primarily stems from differences in what metrics agencies measure, how they weight factors, and how they source data—not from fraud.

Corporate Governance Practice Test

Corporate Governance Practice Test

Corporate Governance And Ethics 3