RCC Corporate Governance and Board Oversight Flashcards
6 cards from real RCC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 RCC Corporate Governance and Board Oversight flashcards as text
What is a 'board compliance committee' MOST commonly responsible for?
Answer: Overseeing the compliance program, reviewing significant compliance risks, and reporting to the full board
A board-level compliance committee provides dedicated governance oversight of the compliance program, receives reports from the chief compliance officer, and escalates material compliance risks to the full board.
The SEC's whistleblower program under Dodd-Frank PRIMARILY incentivizes reporting by offering:
Answer: Monetary awards to individuals who report securities violations that lead to successful enforcement actions
The SEC whistleblower program awards between 10% and 30% of sanctions exceeding $1 million to individuals who voluntarily provide original information leading to a successful enforcement action.
Which principle from the COSO Internal Control framework holds that the board and management should 'set the tone' for internal control through their commitment to integrity?
Answer: Control environment
The control environment component of COSO focuses on the integrity, ethical values, and tone set by leadership as the foundation upon which all other internal control components rest.
In the context of US securities law, 'material non-public information' (MNPI) is significant because:
Answer: Trading on MNPI constitutes insider trading, which is illegal under SEC Rule 10b-5
MNPI refers to information not yet public that a reasonable investor would consider important to an investment decision; trading based on MNPI is insider trading, prohibited by SEC Rule 10b-5.
Annual disclosure of material risks in a public company's Form 10-K PRIMARILY serves to:
Answer: Provide investors with transparent information about risks that could materially affect the business
Risk factor disclosures in a Form 10-K inform investors of material risks so they can make informed investment decisions, fulfilling the SEC's core disclosure mandate.
What does 'clawback' mean in the context of executive compensation governance?
Answer: The recovery of previously paid incentive compensation following a financial restatement or misconduct finding
Clawback provisions allow companies to recover incentive compensation paid to executives when financial results are restated or when misconduct is discovered, as required under SOX, Dodd-Frank, and NYSE/Nasdaq listing rules.