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WorksheetsHSE Corporate Governance Quiz 1
Total questions: 10
Worksheet time: 5mins
The central issue(s) of Corporate Governance is (are):
how to alleviate conflicts of interest between managers and shareholders
how to protect outside investors from the controlling insiders
how to protect creditors from managers and controlling shareholders
how to solve conflicts of interest between shareholders and bondholders
The board of directors is responsible for hiring middle managers in the corporation
True
False
Why do private companies usually make transition to the public ones?
Minimize government involvement in their activities
Promote their product to the world
Gain access to external funds
Avoid paying taxes
Which of the following surely indicates weak Corporate Governance system?
Focus on shareholder’s value as the ultimate objective
Separation of Chairman and CEO role
Passive shareholders and concentrated ownership
Dominant shareholder and activism of minorities
What legislations could enhance corporate governance practice?
Legislation that encourage majority of insiders on the Board
Legislation that encourage less independent board members
Legislation that allows CEO to nominate board members
Legislation that enhance the power of shareholders to pressure the BoD to act in their best interest
Advantage(s) of strong CG is (are):
Lower cost of capital
Higher bonuses to directors
Less shareholder's return
Easier access to capital markets
Which one of these is NOT a key concept of corporate governance?
Accountability
Independence
Integrity
Confidentiality
What sounds most as the Board of Directors' duty?
Help to control the actions of shareholders and make decisions
Assistance to management in strategic matters and control of their actions
Help company to become public
Hire managers to direct the company and make financial decisions
What is the difference between outsiders and insiders in the BoD ?
Outsiders manage insiders
Outsiders act in the interests of shareholders, insiders in the interests of management
Insiders work in the company, outsiders don't
Insiders manage outsiders
The market price of the stock is determined by
The board of directors of the firm
The stock exchange on which the stock is listed
The president of the company
Individuals buying and selling the stock
