Corporate Governance CH 1-4

What is the primary purpose of corporate governance?

 

• To maximize short-term profits

• To ensure accountability, fairness, and transparency

• To increase the salaries of executives

• To avoid paying taxes

Who is responsible for overseeing a company’s management and strategic decisions?

• Shareholders

• Employees

• Board of Directors

• Customers

Which of the following is NOT a key stakeholder in corporate governance?

• Shareholders

• Regulators

• Competitors

• Suppliers

What role do shareholders play in corporate governance?

• They manage the day-to-day operations of the company

• They elect the board of directors and approve significant decisions

• They create company policies

• They handle customer complaints

What is the primary responsibility of management in corporate governance?

• To set the strategic direction of the company

• To oversee the financial reports of the company

• To vote on shareholder proposals

• To manage the day-to-day operations and implement the strategy

Which of the following is a benefit of good corporate governance?

• Reduced accountability

• Increased risk exposure

• Increased investor confidence

• Decreased stakeholder involvement

Why is transparency important in corporate governance?

• It helps reduce competition

• It builds trust among stakeholders and allows for informed decision-making

• It reduces the company’s taxes

• It hides internal issues from the public

Which of the following is a potential consequence of poor corporate governance?

• Increased profitability

• Loss of investor trust

• Improved employee morale

• Enhanced company reputation

Which of the following best describes the role of the Board of Directors (BOD)?

• Day-to-day management of the company

• Overseeing the company's strategic direction and governance

• Only focusing on financial performance

• Managing employee relations

What is the key function of a Non-Executive Director?

• Directly involved in daily operations

• Provides oversight and strategic guidance without managing daily activities

• Executes business plans

• Supervises senior managers