Topic 2: Corporate Governance

In the past, courts generally excused directors from liability for breaching their duty of care if their actions were:

• Criminal

• Negligent

• Fraudulent

• Reckless

Which of the following best describes Bainbridge’s “director primacy model”?

• Shareholders have the most control over the company.

• The CEO makes all major decisions.

• The board of directors has ultimate control over the corporation.

• Courts control corporate strategy.

Which type of board combines executive and non-executive directors in a single governing body?

• Two-tier board

• Unitary board

• Majority executive board

• All-executive board

In the two-tier board structure, who is responsible for daily operations?

• Supervisory board

• Shareholders

• Management board

• Regulators

Which of the following is NOT a key role of the board according to the OECD Principles of Corporate Governance?

• Setting strategic direction

• Conducting effective monitoring of management

• Managing day-to-day operations

• Being accountable to shareholders

Which element of good governance ensures that at least half of board members are independent?

• Effective regulators

• Effective statutory provisions

• Effective board structures

• Codes of best practice and conduct

The role of the company secretary is mainly to:

• Approve major transactions

• Facilitate communication between the board and management

• Hire senior executives

• Conduct external audits

Which statutory provision ensures accountability and ethical practices in corporations?

• Marketing law

• Corporate law

• Environmental law

• Labour law

Which of the following is a responsibility of effective regulators?

• Drafting company mission statements

• Monitoring compliance with laws

• Approving board member salaries

• Managing shareholder meetings

Which principle in a code of best practice ensures that actions and decisions are open to review?

• Confidentiality

• Accountability and transparency

• Integrity and honesty

• Compliance with laws