Practice Test Geeks(ESG) Certified Environmental, Social, and Governance Consultant Practice Test
← All ESG Flashcard Decks

Governance Structures & Ethical Practices Flashcards

7 cards from real ESG practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Governance Structures & Ethical Practices flashcards as text

  1. Which board committee is primarily responsible for overseeing ESG-related risks and sustainability strategy?

    Answer: Sustainability or ESG Committee

    A dedicated Sustainability or ESG Committee provides focused oversight of climate, social, and governance risks at the board level.

  2. What is 'say-on-pay' in the context of corporate governance?

    Answer: A shareholder vote on executive compensation packages

    Say-on-pay gives shareholders an advisory vote on the company's executive compensation policies, enhancing accountability.

  3. Under the UK Corporate Governance Code, what is the recommended maximum tenure for a non-executive director before independence is questioned?

    Answer: 9 years

    The UK Corporate Governance Code suggests that service beyond nine years may compromise a non-executive director's independence.

  4. A company discovers its supplier uses child labor. Which governance mechanism should be the FIRST line of response?

    Answer: Invoke the supplier code of conduct and escalate through the procurement compliance process

    The supplier code of conduct establishes the contractual and ethical framework for addressing violations before escalating to other actions.

  5. What does 'board refreshment' refer to in ESG governance discussions?

    Answer: The planned rotation and renewal of board members to bring in new skills and perspectives

    Board refreshment refers to systematic succession planning that introduces new directors with relevant expertise, preventing entrenchment.

  6. Which of the following BEST describes a 'poison pill' defense in corporate governance?

    Answer: A shareholder rights plan that dilutes acquirer shares to deter hostile takeovers

    A poison pill (shareholder rights plan) allows existing shareholders to buy additional shares at a discount, making hostile takeovers prohibitively expensive.

  7. What is the primary purpose of a whistleblower hotline in corporate governance?

    Answer: To provide employees a confidential channel to report ethical violations or misconduct

    Whistleblower hotlines create a safe, confidential mechanism for employees to report misconduct without fear of retaliation, strengthening internal controls.