Corporate Governance Module Quiz

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Questions and Answers

What is the primary purpose of this module guide?

To provide a comprehensive bibliography on corporate governance.

To offer a detailed overview of copyright law.

To encourage students to report errors and omissions to the publisher.

To develop the student's knowledge and proficiency in corporate governance, ethics and risk. (correct)

Which of the following best describes the intended nature of the field of Corporate Governance according to the preface?

Traditional and well-established.

Regulated and predictable.

Static and unchanging.

Dynamic and innovative. (correct)

What is the stated policy regarding the reproduction of this module guide?

It can be reproduced with acknowledgement of the original author.

It can be freely reproduced for educational purposes.

It may not be reproduced in any form without written permission from the publisher. (correct)

It can be reproduced after a small fee has been paid to the publisher.

How often should the reader expect changes in the field of corporate governance?

Continually (B) Signup and view all the answers

Besides the preface, how many specific units of study are included in the module guide?

8 (D) Signup and view all the answers

What is the primary focus of Unit 7 of the module guide?

Business ethics. (C) Signup and view all the answers

What is being requested via the email address [email protected]?

Feedback on the module content (C) Signup and view all the answers

Which of the following would be found in the 'References' section of this module guide?

Citations for the sources used in the module. (C) Signup and view all the answers

According to the principles of corporate governance, who is primarily responsible for ensuring that assigned tasks are completed to the standards set by the Board of Directors?

The Chief Executive and Exco (C) Signup and view all the answers

What foundational document outlines the rights, duties, and responsibilities of various stakeholders within a company, including shareholders and directors?

Memorandum of Incorporation (MOI) (B) Signup and view all the answers

What is the primary role of a board regarding an organization's strategic direction?

To set and steer strategy, monitor planning and policies, and ensure accountability (B) Signup and view all the answers

Which of the following is NOT a typical outcome of good corporate governance?

Guaranteed maximum profitability regardless of ethics (A) Signup and view all the answers

What does 'accountability' in the context of corporate governance primarily involve?

Taking responsibility for actions and providing explanations. (B) Signup and view all the answers

According to IoDSA (2018), what are Governing bodies generally permitted to do in South Africa, to assist their duties?

Establish committees (D) Signup and view all the answers

According to the Companies Act, what is one of the instances where certain companies are required to establish specific committees?

In specific instances such as establishing an Audit Committee and Social and Ethics Committee (D) Signup and view all the answers

In the context of corporate governance, which of the following are areas where accountability is specifically expected to be applied, besides financial performance?

Social, ethical and environmental aspects (C) Signup and view all the answers

What is a common factor that contributed to corporate failures, according to the text?

Failures in corporate governance and risk management. (A) Signup and view all the answers

Which entity called on the OECD to review its principles for governance, taking into consideration sound risk governance practices?

The Financial Stability Board (FSB). (D) Signup and view all the answers

In financial institutions, what has been the primary focus concerning risks?

Financial risks such as credit, liquidity and market risks. (C) Signup and view all the answers

What aspect of board practices did the Committee examine in relation to corporate risk-taking?

Compensation practices. (C) Signup and view all the answers

What kind of risks are present in non-financial institutions?

Financial and non-financial risks, although not always to the same extent as in financial institutions. (A) Signup and view all the answers

What was the main aim of the review that complemented the Committee’s 2009/10 reviews?

To survey member and partner jurisdictions and examine the adequacy of existing corporate governance principles. (B) Signup and view all the answers

What broader topic, in addition to board practices, addresses risk governance issues mentioned in the text?

Thematic reviews following the financial crisis. (A) Signup and view all the answers

What specific recommendation by the Financial Stability Board is mentioned in the text?

To review OECD's governance principles considering sound risk governance practices. (A) Signup and view all the answers

What is a key characteristic of a risk management framework?

It is the foundation for an organization’s risk management program, supported by related objectives, policies and processes. (B) Signup and view all the answers

Which of the following best describes the primary responsibility of the first line of defence in risk management?

Identifying, assessing, and managing risks inherent in their own products, activities, and processes directly. (B) Signup and view all the answers

What is the role of support functions such as IT management within the three lines of defence?

They are part of the first line of defence, managing risks within their operational areas. (D) Signup and view all the answers

How do first line managers act as a communication bridge?

They act as the link between the organisation’s administration and the workforce, conveying information in both directions. (B) Signup and view all the answers

What is the principal role of the independent risk management function (second line of defence)?

To complement the risk management activities of the business lines and independently challenge their inputs. (B) Signup and view all the answers

Which of the following functions is NOT typically part of the second line of defence?

IT Management (D) Signup and view all the answers

Which statement describes a key responsibility of the second line of defence regarding the risk management framework?

To develop and maintain the risk management framework. (C) Signup and view all the answers

What is a crucial aspect of successful risk management involving the second line of defence?

The second line of defence having a reporting structure independent of the risk-generating business lines. (C) Signup and view all the answers

Outside the financial sector, how is risk management often structured?

Business functions handle risk, with centralized functions playing a supportive role and reporting to management. (B) Signup and view all the answers

What is a potential downside of emphasizing people over formal procedures in risk management?

The financial crisis showed that formal procedures are necessary. (A) Signup and view all the answers

What is a specific concern regarding the models some corporations use for risk management?

They are designed for the financial sector and have proven unreliable. (C) Signup and view all the answers

What should boards prioritize in the context of risk management?

Emphasize the identification, monitoring, and mitigation of potentially catastrophic risks. (D) Signup and view all the answers

What is the state's responsibility in ensuring effective risk management for State-Owned Enterprises (SOEs)?

Ensure the board has sufficient expertise to understand the risks incurred by the SOE. (B) Signup and view all the answers

According to Maroun and Cerbone (2024), what is the main purpose of governance?

To establish a system of checks and balances for accountability to stakeholders. (C) Signup and view all the answers

According to the UK Corporate Governance Code (2016), what is the board of director's primary responsibility?

To direct and control all aspects of company's governance (C) Signup and view all the answers

What do both the UK Corporate Governance Code and the definition by Maroun and Cerbone emphasize about governance?

It involves checks and balances and accountability. (B) Signup and view all the answers

According to King IV, what term is used instead of 'businesses' to indicate applicability to all types of entities?

Organisations (C) Signup and view all the answers

What is NOT one of the governance outcomes described in this text?

Shareholder value maximization (C) Signup and view all the answers

Which of the following is NOT one of the five basic principles of good corporate governance?

The principle of innovation (B) Signup and view all the answers

What does 'ESG' stand for?

Environment, Social, and Governance (A) Signup and view all the answers

Who were the primary interviewees targeted for the described study?

Over 40 global institutional and activist investors and related professionals (D) Signup and view all the answers

What was the primary objective of the study mentioned?

To identify the corporate governance trends impacting boards and directors in 2020 (D) Signup and view all the answers

According to King IV, what should organisations use to scale recommended practices?

Their size, resources, and the complexity of their activities (D) Signup and view all the answers

Beyond merely adhering to legal requirements, what additional factor should contribute to establishing a good performance governance outcome?

Value creation in a sustainable manner (B) Signup and view all the answers

Study Notes

Postgraduate Diploma in Risk Management Module Guide

This is a module guide for a postgraduate diploma in risk management
The module focuses on corporate governance, ethics and risk
Errors and omissions should be reported to [email protected]

The module guide contains various units, including:
- Preface
- Introduction to Risk and Corporate Governance
- Behavioral Risk and Corporate Governance
- Personality and Corporate Governance
- Corporate Governance Management and Stakeholders
- Models of Corporate Governance
- Theories and Philosophies of Corporate Governance
- Ethics in Business
- Risk, Compliance and Controls Framework
- References
- Bibliography

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Test your knowledge of the Corporate Governance module with this quiz. It covers key concepts, unit details, and essential principles from the guide. Perfect for students looking to reinforce their understanding of corporate governance.