Corporate Governance and Business Ethics Quiz

Volkswagen installed software to manipulate emissions tests, making their cars appear compliant but emitting far higher than legal NOx levels.

Formal rules, procedures, and practices that direct and manage companies.

Software installed to bypass emissions standards during testing, allowing for higher actual emissions during normal driving.

Not meeting legal or regulatory requirements. A serious issue in business.

Leaders acting with integrity and accountability, promoting ethical behavior within the company.

Loss of public trust and confidence in a company due to unethical actions or scandals.

The processes put in place to prevent and detect misconduct within a company.

The effects of corporate actions on various parties, including customers, employees, the environment, and society.

Anyone who has an interest in a company's success, including shareholders, employees, customers, and the community.

A group of people elected by shareholders to oversee the company's management and make strategic decisions.

Individuals or organizations who own shares of a company and have a financial interest in its success.

A company's obligation to operate ethically and contribute to the well-being of society.

Processes within a company to prevent and detect misconduct, such as fraud or misuse of assets.

Someone who reports illegal or unethical activities within a company to authorities.

Companies have a duty to consider the interests of all stakeholders – not just shareholders – including employees, customers, suppliers, communities, and the environment.

Companies should be open and honest in their financial reporting, providing clear and accessible information to the public about their performance and activities.

A policy that safeguards employees who report unethical or illegal activities within a company, without fear of retaliation.

Those in charge of a company are answerable for their actions and decisions, ensuring they are held responsible for the company's performance and ethical conduct.

Strong corporate governance builds trust in the market, which leads to higher investor confidence and potentially a higher share price.

Internal controls are designed to minimize risks, prevent fraud, and ensure that the company operates efficiently. It strengthens the company's foundation.

Companies with strong corporate governance practices are seen as more reliable and stable, making them attractive to investors seeking long-term value.

Open and honest communication about a company's financial condition, performance, and ownership, ensuring stakeholders have access to accurate information. This builds trust and confidence.

Protecting shareholder rights, treating all shareholders equally, and providing redress for any violations. It ensures a level playing field for all investors.

Freedom from undue influence when making decisions. This means ensuring decisions are made objectively, without personal biases or conflicts of interest.

Companies being aware of societal issues and taking action to address them, creating a positive impact beyond their immediate business goals.

Protecting the rights of minority shareholders, who hold a smaller percentage of shares, ensuring fair treatment and representation.

A committee formed in 1992 to investigate and report on financial aspects of corporate governance, chaired by Sir Adrian Cadbury.

A committee formed in 1995 to investigate the high salaries of senior executives, particularly in the UK.

A French report on corporate governance, published in 1995. It was important in shaping the French approach to corporate governance.

A series of influential reports on corporate governance in South Africa. The first report was in 1994 and subsequent revisions were made in 2002, 2009 and 2016.

A US federal law passed in 2002 to improve corporate governance and financial reporting in response to major accounting scandals like Enron and WorldCom.

A key provision of the Listing Agreement in India, introduced in 2000, outlining a mandatory corporate governance framework for listed companies.

A committee formed in 2002 to further examine corporate audit and governance in India, building upon the earlier recommendations of Kumar Mangalam Birla Committee.

A key organization in promoting corporate governance in India. They introduced a code of conduct for companies in 1998.

A committee that formulated recommendations for improving corporate governance in India. It focused on areas like board composition, audit committees, and shareholder communication.

The makeup of a company's board of directors, including the mix of executive and non-executive directors. The committee suggests an optimal balance for effective oversight.

A specialized committee of independent directors responsible for overseeing the financial reporting process and internal controls.

A committee responsible for setting the salaries and bonuses of company executives, ensuring fair and transparent compensation practices.

The committee recommends holding at least 4 board meetings annually with a maximum gap of 4 months between meetings.

A director should not be a member of more than 10 committees and should not chair more than 5 committees across all companies.

A report detailing the company's business environment, opportunities, threats, risks, and outlook, including information on internal controls.

The committee emphasizes the importance of providing shareholders with timely and relevant information about their investments.