Corporate Governance and Ethics Flashcards
7 cards from real ACCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Corporate Governance and Ethics flashcards as text
Which of the following best describes 'integrated reporting' as promoted by the IIRC?
Answer: A report that connects financial performance with the six capitals to show how value is created over time
Integrated reporting, under the IIRC framework, shows how an organization uses and affects the six capitals (financial, manufactured, intellectual, human, social/relationship, natural) to create value over time.
A whistleblower policy is MOST important for which purpose in a corporate governance context?
Answer: Providing a safe channel for employees to report suspected misconduct without fear of retaliation
A whistleblower policy protects employees who report wrongdoing from retaliation, encouraging early detection of fraud or misconduct.
In the context of board effectiveness, what does 'board diversity' primarily seek to improve?
Answer: The range of perspectives, skills, and experiences to enhance decision-making quality
Board diversity aims to broaden the range of perspectives and skills, reducing groupthink and improving the quality of strategic and risk decisions.
Which statement about non-executive directors (NEDs) is CORRECT under good governance practice?
Answer: NEDs provide independent oversight and constructive challenge to executive management
Non-executive directors bring independent judgment, challenge management assumptions, and provide oversight without involvement in daily operations.
The OECD Principles of Corporate Governance emphasize which of the following as a core pillar?
Answer: The equitable treatment of shareholders, including minority shareholders
The OECD Principles stress equitable treatment of all shareholders, including minority and foreign shareholders, protecting them from abusive self-dealing.
Which scenario represents a 'conflict of interest' for a director?
Answer: A director approving a contract with a supplier in which the director holds a personal financial stake
A conflict of interest arises when a director's personal financial interest in a transaction could compromise their duty to act in the company's best interests.
Corporate Social Responsibility (CSR) is BEST described as:
Answer: A company's voluntary commitment to operate ethically and contribute to economic development while improving stakeholder welfare
CSR refers to a company's voluntary approach to managing its economic, social, and environmental impacts beyond minimum legal requirements.