Corporate Governance Quiz

What is corporate governance primarily concerned with?

• Increasing marketing effectiveness

• Controlling and directing a company’s operations

• Reducing employee turnover

• Enhancing product quality

According to the Malaysian Code on Corporate Governance, what is the main objective of corporate governance?

• Minimizing operating costs

• Maximizing short-term profits

• Enhancing long-term stakeholder value

• Increasing the number of shareholders

The principal-agent relationship in corporate governance typically refers to the relationship between:

• Managers and suppliers

• Shareholders and employees

• Shareholders and managers

• Managers and customers

What is a key focus area of the Malaysian Code on Corporate Governance (MCCG)?

• Increasing profit margins

• Strengthening board roles in monitoring managers

• Eliminating board independence

• Restricting stakeholder interests

What is a primary role of the board of directors in a corporation?

• Maximize employee salaries

• Supervise and protect shareholder interests

• Only represent the interests of top management

• Reduce company tax obligations

The agency problem arises due to conflicts between:

• Managers and customers

• Shareholders and managers

• Suppliers and customers

• Stakeholders and regulators

A “stakeholder” in corporate governance refers to:

• Only company shareholders

• Anyone with an interest or claim in the firm

• Government officials

• Only the company CEO

What does the term “fiduciary duty” mean in the context of a board of directors?

• Increasing profit margins

• Act in the best interest of the company and shareholders

• Provide personal loans to shareholders

• Avoid regular meetings with stakeholders

Which of the following best describes “conflict of interest”?

• An increase in company profits

• A situation where personal interests interfere with duties

• Positive relations between employees and managers

• External competition affecting the company

What is a key feature of the stakeholder theory?

• Focuses solely on shareholder wealth maximization

• Considers the welfare of all stakeholder groups

• Limits the role of the board of directors

• Emphasizes short-term profitability