Regulatory Compliance & Corporate Governance Flashcards

Under the Foreign Corrupt Practices Act (FCPA), which of the following payments is an explicitly recognized exception to the anti-bribery provisions?

Answer: Facilitating payments to expedite routine government actions

The FCPA contains a narrow exception for 'facilitating payments' made to foreign officials to expedite or secure routine, non-discretionary governmental actions.

Which principle from the OECD Corporate Governance Principles addresses ensuring that all shareholders, including minority shareholders, receive equitable treatment?

Answer: The Equitable Treatment of Shareholders

The OECD principle on Equitable Treatment of Shareholders requires equal treatment, including for minority and foreign shareholders, and prohibits insider trading.

A company implements a 'whistleblower hotline' primarily to satisfy which compliance objective?

Answer: Detecting misconduct through confidential internal reporting channels

Whistleblower hotlines are designed to provide confidential channels for employees to report potential violations without fear of retaliation.

In the context of compliance risk, 'regulatory change management' refers to:

Answer: A process for monitoring, assessing, and incorporating new regulations into business operations

Regulatory change management is a systematic process for identifying new regulations, assessing their impact, and ensuring timely implementation of required changes.

The 'comply or explain' approach to corporate governance, prevalent in many European markets, means that companies must:

Answer: Follow the governance code or publicly disclose and justify any deviations

Under comply or explain, companies may depart from governance code provisions if they publicly disclose the deviation and provide a satisfactory explanation.

Which U.S. regulation introduced the Volcker Rule, which restricts banks from engaging in proprietary trading?

Answer: Dodd-Frank Wall Street Reform and Consumer Protection Act

The Volcker Rule is Section 619 of the Dodd-Frank Act, prohibiting insured depository institutions from engaging in short-term proprietary trading for their own accounts.

An organization's Compliance Management System (CMS) is considered effective when it includes all of the following EXCEPT:

Answer: Zero tolerance for any regulatory examination findings

No CMS guarantees zero findings; effectiveness is measured by the quality of oversight, policies, training, and responsiveness — not an absence of any examination issues.