Principles of Corporate Governance Flashcards
(25 cards)
What is the primary aim of corporate governance?
To enhance shareholder value while ensuring accountability and transparency.
True or False: Financial governance is solely concerned with compliance and regulations.
False
Fill in the blank: The _______ of a company is responsible for overseeing the management and ensuring the company is run in the best interest of its shareholders.
board of directors
What principle emphasizes the need for transparency in corporate governance?
Disclosure principle
Multiple Choice: Which of the following is NOT a key principle of corporate governance? A) Accountability B) Transparency C) Secrecy D) Fairness
C) Secrecy
What does the principle of accountability in corporate governance entail?
It requires that individuals in positions of authority are held responsible for their actions and decisions.
True or False: Stakeholder interests are irrelevant in financial governance.
False
Fill in the blank: The _______ principle ensures that all shareholders have the right to participate in key decisions.
equity
What is one key benefit of effective financial governance?
Improved risk management.
Multiple Choice: Which document typically outlines a company’s governance structure? A) Annual Report B) Corporate Charter C) Financial Statement D) Business Plan
B) Corporate Charter
What role do internal controls play in financial governance?
They help ensure the accuracy and reliability of financial reporting.
True or False: Corporate governance can impact a company’s reputation and public trust.
True
Fill in the blank: The _______ principle advocates for fair treatment of all shareholders.
fairness
What is the significance of the ‘whistleblower’ policy in corporate governance?
It protects individuals who report unethical or illegal activities within the organization.
Multiple Choice: Which of the following is a common risk in financial governance? A) Fraud B) Innovation C) Growth D) Network Expansion
A) Fraud
What does the term ‘conflict of interest’ mean in the context of corporate governance?
A situation where a board member’s personal interests could influence their decisions on behalf of the company.
True or False: Corporate governance is only relevant for publicly traded companies.
False
Fill in the blank: The _______ principle requires that companies disclose their financial performance and operations to stakeholders.
transparency
What is the role of an audit committee in corporate governance?
To oversee financial reporting and disclosure, and ensure the integrity of financial statements.
Multiple Choice: Which regulatory framework is often associated with corporate governance in the United States? A) Sarbanes-Oxley Act B) Dodd-Frank Act C) Glass-Steagall Act D) Both A and B
D) Both A and B
What is the purpose of a corporate governance code?
To provide guidelines and best practices for companies to improve their governance structures.
True or False: Board diversity is considered an important aspect of effective corporate governance.
True
Fill in the blank: Good corporate governance practices can lead to increased _______ in the market.
investor confidence
What is one major challenge in implementing corporate governance?
Balancing the interests of various stakeholders.
