GPHR GPHR Risk Management and Compliance Questions and Answers 2 — Questions and Answers
Question 1: A multinational organization discovers that its subsidiary in Germany is not complying with the EU Works Council directive. What should the global HR professional prioritize first?
- Terminate the local HR manager responsible for compliance
- Conduct a compliance gap analysis and engage local legal counsel (Correct answer)
- Immediately adopt U.S. labor practices across all EU operations
- Suspend all hiring in the German subsidiary until resolved
Correct answer: Conduct a compliance gap analysis and engage local legal counsel
A compliance gap analysis with local legal expertise identifies specific deficiencies and creates a structured remediation plan aligned with local law.
Question 2: Which risk mitigation strategy is most appropriate when an organization identifies that a host country's data privacy laws conflict with the home country's data transfer requirements?
- Ignore the host country's laws since the home country is the headquarters location
- Implement binding corporate rules or standard contractual clauses approved by both jurisdictions (Correct answer)
- Transfer all employee data to a single server in the home country
- Stop collecting employee data in the host country entirely
Correct answer: Implement binding corporate rules or standard contractual clauses approved by both jurisdictions
Binding corporate rules and standard contractual clauses are recognized legal mechanisms for lawfully transferring personal data across jurisdictions with differing privacy requirements.
Question 3: An organization operating in 15 countries wants to establish a global anti-bribery policy. Which legislation should serve as the baseline standard due to its extraterritorial reach?
- The Sarbanes-Oxley Act
- The UK Bribery Act 2010 (Correct answer)
- The Dodd-Frank Wall Street Reform Act
- The Foreign Corrupt Practices Act only applies domestically
Correct answer: The UK Bribery Act 2010
The UK Bribery Act 2010 has the broadest extraterritorial scope and covers both public and private sector bribery, making it an effective global baseline.
Question 4: What is the primary purpose of conducting a global compliance audit on a recurring basis?
- To identify employees who should be terminated for policy violations
- To proactively detect regulatory gaps and emerging risks across all operating jurisdictions (Correct answer)
- To satisfy shareholders that the company is profitable
- To reduce headcount in underperforming regions
Correct answer: To proactively detect regulatory gaps and emerging risks across all operating jurisdictions
Recurring global compliance audits systematically identify regulatory gaps and emerging risks, enabling proactive remediation before violations occur.
Question 5: When assessing political risk in a country where the organization plans to expand, which factor is LEAST relevant to the HR risk assessment?
- Stability of the local government and likelihood of regime change
- Local labor union strength and collective bargaining requirements
- The country's current exchange rate against the U.S. dollar (Correct answer)
- Restrictions on employing foreign nationals and work permit processes
Correct answer: The country's current exchange rate against the U.S. dollar
While exchange rates affect financial planning, they are not a direct HR compliance or workforce risk factor compared to labor laws, political stability, and immigration restrictions.
Question 6: An organization receives a whistleblower report alleging forced labor practices at a third-party supplier in Southeast Asia. Under emerging global supply chain due diligence laws, what is the organization's obligation?
- No obligation exists since the supplier is a separate legal entity
- Investigate the allegation, document findings, and take corrective action if substantiated (Correct answer)
- Immediately terminate the supplier contract without investigation
- Report the allegation only if the supplier is in a country with strict labor laws
Correct answer: Investigate the allegation, document findings, and take corrective action if substantiated
Modern supply chain due diligence legislation such as the German Supply Chain Act requires organizations to investigate, document, and remediate human rights violations within their supply chains.
GPHR GPHR Risk Management and Compliance Questions and Answers 2
A multinational organization discovers that its subsidiary in Germany is not complying with the EU Works Council directive.
What should the global HR professional prioritize first?