Which of the following is NOT a required board committee?

b) Corporate Governance Committee

d) Board Risk Oversight Committee

Who should NOT be the Chairman of the Audit Committee?

c) A director with experience in finance

Which function does NOT belong to the Board Risk Oversight Committee (BROC)?

a) Managing company investments

b) Overseeing the company's risk management system

c) Reviewing risk exposures and management activities

d) Advising the Board on risk appetite levels

What is the minimum number of independent directors required on the Board?

b) Three or one-third of the total members, whichever is higher

d) One-fourth of the total Board members

What must the Board do if it wishes to retain an independent director beyond 9 years?

a) Seek shareholder approval and provide justification

b) Automatically extend the director's term

c) Reduce the director's responsibilities

d) Remove the director from other committees

Why should the Chairman of the Board and CEO be separate roles?

a) To increase accountability and independent decision-making

b) To reduce the number of Board members

c) To allow the CEO to focus on marketing strategies

d) To make governance less complicated

Directors should devote sufficient time to their responsibilities, including being familiar with what?

c) Employee performance evaluations

d) Competitor hiring strategies

What should a director do before accepting a directorship in another company?

b) Notify the Board of the company where they are currently a director

a) Resign from the current board

What is a non-audit service that an external auditor may provide?

c) Product development strategy

Which factor must the Audit Committee evaluate regarding external auditors?

b) Their independence and non-audit fees

a) Their ability to increase company profits

d) Their relationships with employees

Which committee is primarily responsible for reviewing financial reporting and internal controls?

a) Corporate Governance Committee

c) Board Risk Oversight Committee

d) Related Party Transactions Committee

Why is it important for independent directors to be part of the Board?

b) To enhance independent judgment and oversight

a) To ensure marketing strategies align with board expectations

c) To reduce the number of committees required

d) To handle day-to-day operations of the company

What is the primary purpose of board self-assessments?

a) To identify areas for improvement in board effectiveness

b) To review the company's financial statements

c) To increase shareholder profits

d) To promote company marketing strategies

What additional step should be taken every three years during board assessments?

a) Have an external facilitator conduct the assessment

b) Reduce the number of board members

d) Merge the Audit and Risk Oversight Committees

How can shareholders be involved in board performance evaluations?

a) By providing feedback on the Board's effectiveness

b) By electing employees as board members

c) By directly approving financial statements

d) By setting marketing strategies for the Board

What is an "arm's-length transaction"?

a) A transaction where buyers and sellers act independently without special relationships

b) A transaction where family members receive discounts

c) A deal made between a company and its employees

d) A transaction that requires board approval only when over a certain amount

If non-audit fees paid to the external auditor are too high, what could it indicate?

a) A potential conflict of interest

d) Higher company profitability

Which of the following is NOT a key responsibility of the Board?

b) Managing daily business operations

a) Ensuring ethical business practices

c) Establishing a risk management framework

d) Overseeing financial reporting

Board self-assessments should evaluate:

a) Board effectiveness, director participation, and governance practices

d) The CEO's personal investment choices

After serving as an independent director for nine years, an individual may continue on the Board as:

a) An independent director with a new committee

c) A member of the Audit Committee

Risk management should be:

b) An ongoing process reviewed at least annually

c) Handled exclusively by the CEO

d) Focused only on financial risks

Which of the following statements about non-audit work is TRUE?

a) Non-audit work must be evaluated to ensure it does not conflict with audit responsibilities

b) The external auditor is allowed to provide unlimited consulting services

c) All non-audit services are automatically prohibited

d) Non-audit fees should not be disclosed in financial reports

Which of the following best describes corporate governance?

a) A framework for ethical and effective management of a company

b) A set of marketing strategies

c) A method for increasing product sales

d) A plan for reducing employee salaries

Which of the following is NOT a core responsibility of the Board of Directors?

b) Overseeing management performance

d) Ensuring compliance with laws and regulations

Why is it important for directors to devote sufficient time to their responsibilities?

b) To ensure they properly fulfill their oversight and governance duties

a) To maximize their personal financial returns

c) To focus on marketing initiatives

d) To manage the company's daily operations

Who is primarily responsible for ensuring that board members continuously update their skills and knowledge?

b) The Corporate Governance Committee

What is the purpose of the Corporate Governance Framework?

b) To ensure responsible and ethical management of the company

a) To outline company investment strategies

c) To determine employee salary structures

d) To increase marketing outreach

Which committee is responsible for overseeing the nomination and election process of directors?

b) Corporate Governance Committee

c) Board Risk Oversight Committee

A Related Party Transaction (RPT) Committee must ensure transactions with related parties are:

b) Conducted at fair market terms and disclosed properly

a) Approved automatically without review

c) Kept confidential from shareholders

d) Reviewed only in emergencies

Which of the following is NOT a component of enterprise risk management?

b) Managing employee personal investments

a) Identifying and assessing risks

c) Monitoring and mitigating risks

d) Reviewing risk tolerance levels

Why is it important to review the company's risk appetite annually?

a) To ensure it aligns with market and regulatory changes

c) To reduce the number of board meetings

What role does the Board play in ensuring compliance with corporate governance policies?

a) They must oversee and enforce governance standards

b) They should leave it entirely to management

c) They should only be involved during financial crises

d) They should delegate it to shareholders

EGF Quiz 3

Authored by Maria Castillon

Business

12th Grade

Used 1+ times

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50 questions

Show all answers

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The Board is required to establish committees to support its functions, including audit, risk management, and related party transactions.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The Chairman of the Audit Committee can also serve as the Chairman of the Board.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Non-audit work provided by external auditors is always allowed.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The Board Risk Oversight Committee (BROC) is only necessary for small corporations with low-risk profiles.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Directors who are absent from more than 50% of board meetings without justifiable reasons are disqualified from re-election.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The Board should meet with the Audit Committee at least annually.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A non-executive director may serve on more than ten boards of publicly listed companies.

TRUE

FALSE

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EGF Quiz 3

The Board is required to establish committees to support its functions, including audit, risk management, and related party transactions.

The Chairman of the Audit Committee can also serve as the Chairman of the Board.

Non-audit work provided by external auditors is always allowed.

The Board Risk Oversight Committee (BROC) is only necessary for small corporations with low-risk profiles.

Directors who are absent from more than 50% of board meetings without justifiable reasons are disqualified from re-election.

The Board should meet with the Audit Committee at least annually.

A non-executive director may serve on more than ten boards of publicly listed companies.

An independent director can serve for a maximum cumulative term of nine years.

A director with a material interest in a transaction should abstain from participating in deliberations on that transaction.

Board self-assessments should be conducted every five years.

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