Ethics and Governance Revision - First Half

In sharing tips of exams, which principle is violated under the “Character” test?

• Integrity and honesty

• Transparency and stakeholder benefit

• Legal compliance

A company uses misleading advertisements to increase sales. Which ethical issue does this fall under?

• Deceptive Marketing

• Insider Trading

• Conflicts of Interest

An organization designs bonuses only around short-term sales targets, leading employees to ignore ethical standards. Which contributing factor to unethical behavior is most evident?

• Weak ethical culture

• Poor incentive design

• Peer influence and social norms

A global company faces different cultural norms about gift-giving in business. Which solution best balances ethical integrity and local practices?

• Apply global standards without exceptions

• Adapt global ethics to local contexts while upholding universal values

• Allow each country to decide its own ethical rules independently

What is the main purpose of corporate governance?

• 
  To oversee and guide the company for accountability and stakeholder protection
  

• To plan and execute daily business strategies for profit maximization

• To allow managers freedom to prioritize personal goals

In agency theory, which problem occurs when managers act in their own interests rather than shareholders’?

• Principal-agent problem

• Conflict of independence

• Insider alignment issue

Which of the following is an example of residual loss in agency costs?

• Audit expenses

• Bonus payments for performance

• Renovating offices with luxury designs for personal comfort

Answer explanation

residual loss = spending for personal interest

What is the key difference between a two-tier and one-tier board structure?

• One-tier has both supervisory and management boards

• Two-tier separates supervisory and management roles clearly

• Two-tier boards are faster at decision-making than one-tier

According to MCCG 2021, what is the maximum term for an independent director before mandatory step-down or redesignation under Listing Rules?

• 9 years

• 12 years

• 15 years

Then WITHOUT ANY EXTENSION, According to MCCG 2021, what is the maximum term for an independent director to be reappointed?

• 9 years

• 12 years

• 15 years