On This Page
This set of Corporate Governance Multiple Choice Questions & Answers (MCQs) focuses on Corporate Governance Set 4
Q1 | Directors’ responsibilities are unlikely to include.
- a fiduciary duty
- a duty to keep proper accounting records
- a duty to propose high dividends for shareholders
- a duty of care
Q2 | A company may become insolvent if it
- has negative working capital
- cannot meet its budgeted level of profit
- makes a loss
- cannot pay creditors in full after realisation of its assets
Q3 | A director of a limited company may not be liable for wrongful trading if he or she
- took every step to minimise the potential loss to creditors
- increased the valuation of its inventories to cover any potential shortfall
- introduced into the balance sheet an asset based on a valuation of its brands sufficient to meet any shortfall
- brought in some expected sales from next year into the current year
Q4 | Fraudulent trading may be
- a civil offence committed by any employee
- a criminal offence committed only by directors of a limited company
- a civil and a criminal offence committed only by directors of a limited company
- a civil and a criminal offence committed by any employee
Q5 | The OECD argues that corporate governance problems arise because:
- Ownership and control is separated
- Managers always act in their own self interest
- Profit maximization is the main objective of organizations
- Stakeholders have differing levels of power
Q6 | An organization that is owned by shareholders but managed by agents on their behalf isconventionally known as the modern:
- Conglomerate
- Corporation
- Company
- Firm
Q7 | The modern corporation has four characteristics. These are limited liability, legal personality,centralized management and:
- Fiduciary duty
- Stakeholders
- Shareholders
- Transferability
Q8 | What makes a corporation distinct from a partnership?
- If the members of a corporation die, the corporation remains in existence providing it has capital
- If the members of a corporation die, the corporation ceases to exist
- A corporation cannot own property
- A corporation cannot be held responsible for the illegal acts of its employees
Q9 | The term 'asymmetry of information' means information in a corporation is:
- Transferable to all stakeholder
- Not transferable to all stakeholders
- Not equally transparent to all stakeholders
- Equally transparent to all stakeholders
Q10 | The view that sees profit maximization as the main objective is known as:
- Shareholder theory
- Principal-agent problem
- Stakeholder theory
- Corporation theory
Q11 | Where an organization takes into account the effect its strategic decisions have on society, thisis known as:
- Corporate governance
- Business policy
- Business ethics
- Corporate social responsibility
Q12 | Which intervention resulted from the Enron scandal?
- The Hampel Committee
- The Sarbannes-Oxley Act
- The Greenbury Committee
- The Cadbury Committee
Q13 | Periodic ethics audits
- Are required by the Indian stock exchange
- A method of fostering ethics
- A method of quantitative assessment
- Always use external consultants
Q14 | Political intrusion into business
- May be desirable in some circumstances
- Is anathema
- Politics should have no say in how business is conducted
- state legislation over-rides Federal Legislation
Q15 | Quantification in ethics may be done by
- Putting monetary value on prospective actions
- Comparing the value of one action with another
- Both A and B
- Neither A or B
Q16 | The approach to formal corporate ethics initiatives is proactive and inspirational.
- Rule
- Compliance
- Principles
- Values
Q17 | The approach to formal corporate ethics initiatives focuses on meeting required behaviour norms or obeying the letter of the law
- Rule
- Compliance
- Principles
- Values
Q18 | Which of the following is associated with the classical view of social responsibility?
- economist Robert Reich
- concern for social welfare
- stockholder financial return
- voluntary activities
Q19 | How many stages are in the model of an organization social responsibility progression?
- 3
- 4
- 5
- 6
Q20 | The belief that a firm pursuit of social goals would give them too much power is known as what argument in opposition to a firm being socially responsible?
- Cost
- lack of skills
- lack of broad public support
- too much power
Q21 | Social responsiveness refers to the capacity of a firm to adapt to changing .
- societal condition
- organizational conditions
- societal leaders
- organizational managers
Q22 | Applying social criteria to an investment decision refers to .
- socioeconomic view
- social responsiveness
- social responsibility
- social screening
Q23 | Which of the following is a basic definition of ethics?
- moral guidelines for behaviour
- rules for acknowledging the spirit of the law
- rules or principles that define right and wrong conduct
- principles for legal and moral development
Q24 | Global organizations must their ethical guidelines so that employees know whatis expected of them while working in a foreign location
- Clarify
- Provide
- Establish
- broaden
Q25 | is a document that outlines principles for doing business globally in theareas of human rights, labour, the environment, and anticorruption.
- A code of ethic
- The Global Compact
- The Foreign Corrupt Practices Act
- Global Ethics