CSM Professional Ethics & Governance 3

Question 1

A board of directors is evaluating a major acquisition that benefits the CEO personally. Which governance safeguard is most appropriate?

Accepted Answer

Require the CEO to recuse from the vote and form an independent committee

Answer

When a conflict of interest exists, the conflicted party should recuse themselves, and an independent committee should evaluate the transaction to protect shareholders.

Question 2

The 'triple bottom line' framework in strategic governance measures organizational performance across:

Accepted Answer

People, planet, and profit

Answer

The triple bottom line framework evaluates organizational success across social (people), environmental (planet), and financial (profit) dimensions simultaneously.

Question 3

Which type of audit specifically evaluates whether an organization is following its own stated ethical policies and codes of conduct?

Accepted Answer

Ethics and compliance audit

Answer

An ethics and compliance audit systematically examines whether the organization's practices align with its stated ethical policies, codes of conduct, and regulatory requirements.

Question 4

Stakeholder theory in strategic management argues that managers should primarily:

Accepted Answer

Balance the interests of all parties affected by the organization's actions

Answer

Stakeholder theory holds that organizations have ethical obligations to all parties impacted by their decisions, not just shareholders, requiring managers to balance competing interests.

Question 5

Which governance principle requires that decision-makers be answerable for their actions and the outcomes of those actions?

Accepted Answer

Accountability

Answer

Accountability is the governance principle that holds individuals responsible for their decisions and requires them to answer to stakeholders for the consequences of those decisions.

(CSM) Certified Strategic Manager Practice Test

(CSM) Certified Strategic Manager Practice Test

CSM Professional Ethics & Governance 3