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
A company operating in multiple countries adopts a single global code of ethics. What is the PRIMARY challenge this approach presents?
Answer: Local legal requirements or cultural norms may conflict with the global standard
While a uniform global code promotes consistency, it may conflict with local laws, customs, or business practices, requiring careful adaptation or supplemental local policies.
Which of the following BEST describes a 'dual-class share structure' and its governance implication?
Answer: A share structure where some shares carry more voting rights than others, concentrating control
Dual-class share structures allow founders or insiders to retain voting control even as they sell economic interests, raising concerns about accountability to ordinary shareholders.
Which of the following actions would most likely violate the anti-retaliation provisions of the Dodd-Frank Act?
Answer: Terminating an employee who reported potential securities violations to the SEC
Dodd-Frank explicitly prohibits employers from retaliating against employees who report potential securities law violations to the SEC.
What is the role of a company's General Counsel in relation to the compliance function?
Answer: The General Counsel provides legal advice but the CCO independently manages compliance
In many organizations, the General Counsel and Chief Compliance Officer are separate roles; legal counsel advises on law while the CCO manages the compliance program independently.
A board of directors adopts a 'majority voting' standard for director elections. What does this mean?
Answer: A director must receive more votes 'for' than 'against' to be elected or re-elected
Under majority voting, a director must receive more 'for' votes than 'withheld' or 'against' votes to be elected, giving shareholders more meaningful influence over board composition.
Which of the following is a PRIMARY indicator that a company has an effective compliance culture rather than merely a compliance program?
Answer: Employees proactively raise ethical concerns and seek guidance before acting
A genuine compliance culture is evidenced by employees voluntarily raising concerns and seeking ethical guidance, indicating that ethics is internalized rather than externally imposed.
Under the COSO Internal Control – Integrated Framework, which of the following is NOT one of the five components of internal control?
Answer: Stakeholder Engagement
The five COSO components are Control Environment, Risk Assessment, Control Activities, Information & Communication, and Monitoring Activities — Stakeholder Engagement is not one of them.