Ethics & Corporate Governance Flashcards
7 cards from real RCMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethics & Corporate Governance flashcards as text
A compliance manager is asked to approve a transaction that benefits a close personal friend but is technically within policy. Which ethical framework best guides the decision to refuse?
Answer: Virtue ethics — acting as a person of good character would act
Virtue ethics focuses on character and integrity, guiding professionals to avoid even technically permissible actions that compromise impartiality.
Which SEC rule requires public companies to disclose whether they have adopted a code of ethics for senior financial officers?
Answer: Item 406 of Regulation S-K
Item 406 of Regulation S-K requires companies to disclose whether they have a code of ethics for their principal executive and financial officers.
What does the term 'corporate social responsibility' (CSR) primarily refer to in a governance context?
Answer: Voluntary initiatives to create positive social and environmental impact beyond legal requirements
CSR encompasses voluntary corporate actions that address social, environmental, and ethical concerns beyond minimum legal compliance.
An ethics hotline report alleges that a VP of Finance manipulates expense reports. Who in the organization is MOST appropriate to lead the investigation?
Answer: An independent internal audit team or outside counsel
Investigations involving senior executives should be led by independent internal audit or outside counsel to ensure objectivity and avoid conflicts.
The principle of 'materiality' in corporate governance disclosures means that information must be disclosed if:
Answer: A reasonable investor would consider it important in making an investment decision
Materiality is defined by whether a reasonable investor would consider the information significant when making an investment decision.
Which governance body is typically responsible for approving an organization's enterprise risk management (ERM) framework?
Answer: The full Board of Directors or a designated risk committee
The Board of Directors or a board-level risk committee holds ultimate accountability for approving and overseeing the ERM framework.
A company establishes a 'speak-up' culture by ensuring employees who report concerns face no adverse employment actions. This policy is best described as:
Answer: An anti-retaliation or non-retaliation policy
A non-retaliation policy protects employees from adverse actions when they report ethics concerns in good faith.