Corporate Governance Module Quiz

The document outlining shareholders', directors', and others' rights, duties, and responsibilities within a company.

A board's role is to set strategic direction, monitor planning and policies, and ensure accountability.

Good corporate governance leads to strong financial performance, ethical culture, effective controls, and organizational legitimacy.

Taking responsibility for actions, including recognizing problems and seeking solutions.

Involves providing answers through reporting, auditing, and transparency in financial, social, ethical, and environmental areas.

Governing bodies can establish committees to assist with their roles and duties.

The Companies Act in South Africa allows boards to appoint committees as needed.

The Companies Act mandates certain companies to establish an Audit Committee, Social, and Ethics Committee.

The introduction section of a module guide that welcomes students and provides an overview of the module.

The study of how companies are directed and controlled. It's about setting standards for responsible business practices.

The study of how individual's personality and values influence ethical decision making and their role within the corporate environment.

The systematic process of identifying, analyzing, and managing risks that could affect an organization's goals and objectives.

A framework that outlines the rules, policies, and procedures designed to ensure compliance with laws, regulations, and ethical standards.

The branch of ethics that deals with moral principles and values applied to business conduct.

A set of principles and frameworks that govern how companies interact with their stakeholders, such as employees, investors, customers, and the community.

The various theories and philosophical perspectives that contribute to the understanding and practice of good corporate governance.

The ability to achieve organizational change while also increasing returns on equity (RoE).

A framework that provides a foundation and guidance for an organization's risk management program. Includes policies, commitments, plans, and processes.

A system for managing risks within a company that uses three levels of responsibility.

The first line of defense in risk management. They are responsible for identifying, assessing, managing, monitoring, mitigating, and reporting risks within their area of operation.

The second line of defense in risk management. They are responsible for independently reviewing and challenging the first line's risk management practices, ensuring the effectiveness of the framework.

The third line of defense in risk management. They provide independent assurance over the effectiveness of the risk management framework and the related controls.

The first line of defense in risk management. These managers connect the organization's administration with the workforce, ensuring information flows smoothly.

A function that complements the business line's risk management activities. It is independent of the risk-generating business lines and is responsible for planning, maintaining, and developing the organization's risk management framework. It also challenges the adequacy of the business lines' risk management practices and outputs.

Principles that guide a company to make decisions in an ethical and responsible way, considering its impact on the environment, society, and the economy.

This study examined the corporate governance trends that 40+ global investors and experts identified.

A culture that fosters ethical behavior and promotes strong leadership at all levels.

This includes creating value for shareholders while also considering long-term sustainability.

The processes and structures that organizations use to manage and mitigate risks. It involves setting risk appetite, identifying and assessing risks, developing and implementing risk responses, and monitoring and reporting on risks.

The committees within an organization that oversee the company's risk management and governance activities. These committees ensure that risks are adequately identified, assessed, and mitigated.

Effective controls and informed oversight to minimize risks and safeguard the company.

Gaining the trust and confidence of stakeholders, including employees, customers, and the communities in which the company operates.

The risks that a company faces that are not directly related to financial performance, such as environmental, social, or reputational risks. These risks can have significant impacts on the company's long-term sustainability.

The risks that a company faces that are directly related to financial performance, such as credit risk, liquidity risk, or market risk. These risks can impact the company's profitability and financial stability.

Sharing information openly and honestly to build transparency and accountability.

Taking responsibility for actions and decisions, and being answerable for the consequences.

A type of financial risk that arises from the possibility of losing money due to a borrower's failure to repay a loan. This risk is higher for companies that lend money to borrowers with poor credit history.

A type of financial risk that arises from the possibility of a company not having enough liquid assets (cash or assets that can be easily converted to cash) to meet its short-term financial obligations. This risk is higher for companies with limited cash reserves or volatile income streams.

A type of financial risk that arises from the possibility of losing money due to fluctuations in market prices, such as changes in interest rates, stock prices, or commodity prices. This risk is higher for companies that have significant investments in financial markets.

A type of risk that arises from failures in a company's internal processes, people, or systems. This can include risks related to fraud, cyberattacks, human error, or technology breakdowns.

The King IV report distinguishes between various organizations within the corporate governance ecosystem by acknowledging that governance frameworks are dynamic and should be customized to suit the individual contexts.

The UK Corporate Governance Code defines corporate governance as the mechanisms by which companies are directed and controlled. This responsibility lies with the board of directors.

Outside the financial sector, risk management is often treated less formally. Business functions often handle risks, with centralized risk management acting as a supportive coordinator.

Even though focusing on people instead of procedures has benefits, the financial crisis highlights the importance of formal procedures in risk management.

Some companies continue to rely on financial sector models that proved unreliable during the financial crisis. This emphasizes the need for more tailored, accurate risk assessment.

Boards should prioritize identifying, monitoring, and mitigating catastrophic risks, regardless of their perceived likelihood.

When appointing boards of state-owned enterprises (SOEs), the state should ensure that members have sufficient expertise to understand the risks faced by the SOE.

Without interfering in day-to-day management, the ownership function of SOEs should use opportunities through strategic directives and regular dialogues to ensure proper risk management frameworks are in place.