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Corporate Governance & Compliance Flashcards

7 cards from real CEA 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 & Compliance flashcards as text

  1. Which board committee is primarily responsible for overseeing a company's financial reporting and internal controls?

    Answer: Audit Committee

    The Audit Committee oversees financial reporting integrity, internal controls, and the external audit process.

  2. A publicly traded U.S. company must disclose material information to all investors simultaneously under which regulation?

    Answer: Regulation Fair Disclosure (Reg FD)

    Regulation Fair Disclosure (Reg FD) requires companies to disclose material information to all investors at the same time, preventing selective disclosure.

  3. What is 'say on pay' as established by the Dodd-Frank Act?

    Answer: A shareholder advisory vote on executive compensation

    'Say on pay' gives shareholders a non-binding advisory vote on executive compensation packages at least once every three years.

  4. Under the Foreign Corrupt Practices Act (FCPA), which of the following is a recognized exception to the anti-bribery provisions?

    Answer: Facilitating payments to expedite routine governmental actions

    The FCPA includes a narrow exception for facilitating or 'grease' payments made to expedite routine non-discretionary government actions such as processing permits.

  5. Which principle requires that board directors avoid situations where their personal interests conflict with the interests of the corporation?

    Answer: Duty of Loyalty

    The Duty of Loyalty requires directors to prioritize the corporation's interests over their own personal or financial interests.

  6. A company's Code of Conduct is MOST effective when it is:

    Answer: Enforced consistently regardless of an employee's seniority

    Consistent enforcement at all levels, including senior management, is critical to a Code of Conduct's credibility and effectiveness.

  7. Which governance mechanism is designed to align the long-term interests of executives with those of shareholders?

    Answer: Performance-based equity compensation

    Performance-based equity compensation, such as stock options or restricted stock units tied to company performance, aligns executive incentives with shareholder value creation.