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WorksheetsBT Ch-5 Corporate Governance
Total questions: 53
Worksheet time: 1hrs 19mins
Stewards are the owner of a company. They are not accountable to anyone.
True
False
Shareholders of the company can dismiss the steward or the executive management of the company.
True
False
Shareholder of the company received relevant information of the company by …………………………….. Source.
News papers and magazines
TV or News channels
Emails or by stock exchanges
Audited accounts / annual reports.
Agency theory of management states that managers …………………………………………………….
Should manage the organization that will benefit the stake holders
Should manage the organization that will benefit the Shareholders only
Management seeks to service their own interest and only look after the performance of the company.
Manager has the duty of care, for all the stake holders and share holder of the company.
………………………… states that management has a duty of care, not just to the owners of the company in terms of maximizing shareholder value, but also to the wider community of interest, or stakeholders.
Stewardship theory
Agency Theory
Stakeholder theory
Governance theory.
…………………………… is the system by which organization are directed and controlled by senior officers or management.
Procedure
M I S
Corporate governance.
Operational management.
Which of the following is not the feather of poor corporate governance?
Dominate by single individual / Lack of involvement of the board
Lack of adequate control function / Lack of supervision
Lack of independent scrutiny / lack of contact with shareholders
None of the Above.
In few cases it is observed that Board is dominated by a single senior executive while other members merely acting like a rubber stamp.
True
False
In most countries, what is the usual purpose of codes of practice on corporate governance?
To establish legally binding requirements to which all companies must adhere
To set down detailed rules to regulate the ways in which companies must operate
To provide guidance on the standards of best practice that company should adopt
To provide a comprehensive framework for management and administration
The performance of the Director in the board cannot be assessed by the board.
True
False
One tier board is also known as unitary system.
True
False
…………………………… is the type of board in which board of directors are legally charged with the responsibility of govern the company.
One tier board / unitary system.
Two tier board
Non Executive board
Supervisory board.
…………………………system there is an executive management board of directors and this is monitored by a supervisory board of directors.
Single type BOD
One tier board / unitary system
Supervisory board
Two tier board
Which of the following task should not to be performed by the board of directors?
Monitoring the C.E.O and overseeing strategy
Monitoring the human capital including training, morale, and remuneration etc.
Monitoring risk and control system.
Interfere management daily business operations.
The board of directors should be of same knowledge and work experience to have a uniform policy.
True
False.
Member of the board of Director. Directors are needless to have relevant expertise in industry, company function area and governance.
True
False
Member of the BOD are recommended by the …………………………….. Committee.
Director
Audit
Nomination
Security
Higgs report stresses that it is the responsibility both of the Chair to decide what information should be made available, and directors to satisfy themselves that they have appropriate information of sufficient quality to make sound judgments.
True
False.
Higgs report suggests that the appraisal of the board performance should be done 4 times a year.
True
False
Directors of a company are accountable to …………………………………. Of the company.
Management
CEO
Share holders
General Public
What is the key risk associate, if the director’s accountability is associate to its performance?
That he will get angry
Over work will cause negative effect on this heath.
Interference in other people work.
Attention being diverted away from making the company profitable, potentially damaging the long-term success of the business
Non-executive directors have executive (managerial) responsibilities.
True
False
…………………………. Are responsible for determining appropriate levels of remuneration for executive directors and other senior managers.
Directors
Non Executive Directors
Board of executives
Senior management
Audit and remuneration committee should have equal member of executive and non executive directors.
True
False.
Remuneration committee should also decide the fees and benefits for the NEDs.
True
False.
Non executive directors are entitled to get pension after retirement.
False.
False
The nomination committee should consist of a majority of ……………………………………..
Non-executive directors
Executive directors
Independent / Outsource experts
CEO and Chairman.
………………………………….Can provide help and assistance in the case of any problem facing by the external auditors.
Government
Employees union
Internal auditors
Audit committee.
External auditors are appointed and remove by the …………………………….. Committee of the board of directors.
Accounts committee
Risk control
Audit committee
Nomination committee
Which of the following is not the duty of the audit committee?
Review of the financial statement
Liaison with external auditors / review of internal auditor
Review of the internal control / Investigation
None of these
Which of the following is not the social responsibility strategy?
Proactive
Defense
Accommodation
Feedback.
…………………………. Strategy in which company takes full responsibility of its product and in case of any defect it fix it before complain.
Proactive
Reactive
Defense
Accommodation
……………………….. Strategy in which company take action regarding its complain only when it came in the notice of the govt. Consumer or regulators. Else it keeps things going on.
Proactive
Reactive
Defense
Accommodation
According to the stakeholder view, CSR is in the long-term interests of shareholders because it helps to secure stakeholder support, access to resources, sustainable business relationships and so on
True
False
Which of the following is not the driving force for the development of corporate governance?
Increasing internationalization and globalization
Differential treatment of domestic and foreign investors.
High profile corporate scandals.
Empowerment of lower management.
The board that meet irregularly or fail to consider systematically the organization’s activity and risk are sign of.
Good corporate governance.
Lack of none executive directors participation.
Weakness and ineffectiveness.
Normal activity.
Rapid turnover of staff in the accounting or control department will results into …………………………………
Creating new vacancies for fresh graduates.
Out of turn promotions and rise in salary.
Put extra work load on the sales and recovery team.
Make control more difficult because of lack of continuity
Time has proved that the principle of employee’s supervision by senior management has failed to reduce or control large losses for the organization. Employee’s incompetence, negligence and fraudulent activity cannot be control by supervision.
True.
False.
Segregation of duties of key roles can play an important role in effective corporate governance.
True.
False.
Remuneration packages regardless to the results or performance of the directors has resulted into poor performance and lack of touch with the interest of the other shareholders in the company.
True.
False.
What is the ultimate risk of poor corporate governance?
Company will have a poor internal control structure.
Board of director will consider for outsourcing internal control department.
Shareholders will start selling their shares in the capital market.
May results in bankruptcy or may be even closed by govt. authorities due to serious regulatory breaches etc.
What is the responsibility of a Public Oversight Board? (PP)
The establishment of detailed rules on internal audit procedures
The commissioning of financial reporting standards
The creation of legislation relating to accounting standards
The monitoring and enforcement of legal and compliance standards
Board of Directors should take the following decisions. Which of the following one is incorrect?
Mergers and takeovers
Acquisitions and disposals of large or valuable assets.
Material purchases and determines minimum inventory level
Repayment of foreign currency transactions etc.
Corporate governance gave permission to the none-executive directors to take part in share options scheme.
True
False.
Accounts should show the remuneration policy, pension rights and the packages of individual directors.
True
False
Nomination committee of the board of directors should totally consist of none-executive directors.
True
False
Audit committee and remuneration committee should have equal numbers of executive Directors and N.E.Ds.
True
False
The appointment of the NEDs is done by the nomination committee.
True
False
Sustainability reporting in the financial accounts mean……..
That the company should disclose about its future plans.
About its going concern.
Social transformation, ethical, safety, health and environment management policies and practices.
About getting information from internal and external sources.
Sustainability reporting is also known as social responsibility report.
True
False
Social responsibility and ethical behavior are not the same things.
True
False
Ethics are values and principles that society expects companies and individuals to follow.
True
False
Which of the following are not the strategies for the social responsibility? State the one incorrect?
Proactive strategy
Reactive strategy
Defense strategy
Corporate strategy
