Corporate Governance and Ethical Standards Flashcards
7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Corporate Governance and Ethical Standards flashcards as text
Under NYSE and Nasdaq listing standards, what percentage of board members must be independent for most listed companies?
Answer: Majority (more than 50%)
Both NYSE and Nasdaq require that a majority of board members be independent directors.
Which international framework provides principles for corporate governance including responsibilities of the board, equitable treatment of shareholders, and transparency?
Answer: OECD Principles of Corporate Governance
The OECD Principles of Corporate Governance are widely recognized international standards covering board responsibilities, shareholder rights, and disclosure.
What is a 'clawback' provision in executive compensation governance?
Answer: A requirement to recover previously paid incentive compensation under certain conditions
Clawback provisions require companies to recover previously awarded compensation if financial restatements or misconduct occur.
An organization's ethics hotline receives a report alleging a manager is falsifying expense reports. Which function should receive this report FIRST for investigation?
Answer: Compliance or Internal Audit function
Ethics hotline reports are typically triaged by Compliance or Internal Audit, which maintains independence and investigative authority.
The 'Triple Bottom Line' (TBL) framework in corporate governance measures performance across which three dimensions?
Answer: People, Planet, and Profit
TBL evaluates organizational performance on social (People), environmental (Planet), and financial (Profit) dimensions.
Which of the following is a key indicator that a board is FAILING in its oversight responsibilities?
Answer: Over-reliance on management-prepared information without independent verification
Passive acceptance of management-provided information without independent verification is a classic governance failure indicator.
What does 'piercing the corporate veil' mean in the context of corporate governance?
Answer: Holding directors personally liable by disregarding the corporate entity
Piercing the corporate veil allows courts to hold directors or shareholders personally liable when the corporate form is abused.