4. Stakeholders And Regulators

Question 1

The majority of shareholder activism is driven by groups concerned with issues of — —

Answer 1

Social responsibility

Question 2

What are the two main mechanisms of shareholder activism?

Answer 2

Dialogue

Formal shareholder resolutions

Question 3

What is a shareholder dialogue?

Answer 3

Discussion or negotiation between management and shareholder or shareholder group to effect change on an issue

Question 4

A formal shareholder resolution involves submitting a — for voting at the AGM

Answer 4

Proposal

Question 5

The current regulatory system of the UK financial sector has been characterised as a t— system

Answer 5

Tripartite

Question 6

Of what three institutions does the current tripartite financial sector regulatory system consist?

Answer 6

Bank of England
Financial Services Authority
HM Treasury

Question 7

From April 2013, the responsibilities of the FSA were split between what three institutions?

Answer 7

Bank of England
Prudential Regulation Authority
Financial Conduct Authority

Question 8

The Bank of England is responsible for — policy

Answer 8

Monetary

Question 9

HM Treasury is responsible for — policy

Answer 9

Fiscal

Question 10

What is the purpose of the Financial Reporting Council?

Answer 10

Strengthen and promote confidence in corporate reporting and governance in UK

Question 11

List the six functions of the FRC designed to strengthen and promote confidence in corporate reporting and governance in the UK

Answer 11

Promote high standards of corporate governance
Set, monitor, enforce accounting and auditing standards
Set actuarial standards
Statutory oversight and regulation of external auditors
Independent investigation and discipline for public interest cases
Overseeing regulatory activities of professional accountancy and actuarial bodies

Question 12

In what five ways does the FRC aim to promote high standards of corporate governance?

Answer 12

Maintains corp governance code
Ensures related guidance current and relevant
Influences EU and global corp governance developments
Promotes boardroom professionalism and diversity
Encourages constructive interaction between boards and institutional shareholders

Question 13

Which part of the FRC reviews and monitors developments in corporate governance?

Answer 13

The Committee on Corporate Governance

Question 14

List the seven parts of the FRC

Answer 14

Accounting Standards Board
Auditing Practices Board
Board for Actuarial Standards
Professional Oversight Board
Financial Reporting Review Board
Accountancy and Actuarial Discipline Board
Committee on Corporate Governance

Question 15

What are the two key roles of the Department for Business, Innovation and Skills with respect to Corporate Governance?

Answer 15

Investigates aspects of corporate behaviour that might harm business community and the public
Leads regulatory reform agenda across government

Question 16

What branch of the Department for Business, Innovation and Skills investigates corporate behaviour?

Answer 16

Companies Investigation Branch

Question 17

What branch of the Department for Business, Innovation and Skills leads regulatory reform agenda across government?

Answer 17

Better Regulation Executive

Question 18

The work of the Better Regulation Executive is underpinned by what five key principles pertaining to regulation?

Answer 18

Regulation should be…

Transparent
Accountable
Proportionate
Consistent
Targeted

Question 19

In shareholder activism, an activist shareholder typically uses an equity stake in a corporation to…

Answer 19

Put pressure on management