Corporate Governance Players Quiz

Play an AI-generated podcast conversation about this lesson

Which party is responsible for overseeing the corporate risk management framework and monitoring risks?

Board of Directors (correct)

Management

Audit committee of the board of directors

Shareholders

What is the main responsibility of shareholders?

Receiving annual reports on management compensation

Receiving dividends

Electing the board of directors (correct)

Approving major initiatives

Who is responsible for approving the annual financial reports and other public documents?

Shareholders

External auditors

Management

Board of Directors (correct)

What is the role of non-executive or independent directors?

Prepare for and attend board meetings Signup and view all the answers

Who is responsible for managing the organization effectively and providing accurate and timely reports to shareholders and other stakeholders?

Management Signup and view all the answers

Who is responsible for establishing the organization's vision, mission, values, and ethical standards?

Board of Directors Signup and view all the answers

Who is responsible for recommending auditors and new directors to shareholders?

Board of Directors Signup and view all the answers

According to Milton Friedman, what is the one and only social responsibility of business?

To increase its profits Signup and view all the answers

According to stakeholder theory, what does a socially responsible corporation consider?

The impact of its decisions on a wide range of stakeholders Signup and view all the answers

Who are the stakeholders in a corporation?

Customers, suppliers, employees, investors, communities, and others Signup and view all the answers

What is the main concern of shareholders?

Return on investment Signup and view all the answers

What is the relationship between shareholders/owners and other stakeholders in a corporation?

Shareholders/owners delegate responsibilities to management and demand accountability Signup and view all the answers

What does financial transparency refer to?

Providing accurate and complete information about the organization's activities and governance to stakeholders Signup and view all the answers

What does the composition of the board of directors need to be responsive to?

Supervising and monitoring, avoiding opportunistic behavior, providing advice Signup and view all the answers

Which of the following best describes a shareholder?

A person or institution that owns shares or stock in a public or private operation Signup and view all the answers

Based on the information provided, who can be considered a stakeholder?

An individual impacted by the outcome of a project Signup and view all the answers

What is the main difference between shareholders and stakeholders?

Shareholders have a financial interest in the profitability of the organization, while stakeholders are interested parties affected by the company's activities Signup and view all the answers

According to Milton Friedman, what is the moral duty of a corporation?

To make the most possible money or maximize profits for its stockholders Signup and view all the answers

Who can be considered a stakeholder in a company?

Owners and shareholders Signup and view all the answers

Are all shareholders considered stakeholders?

Yes Signup and view all the answers

What is the primary interest of shareholders?

The profitability of the organization or project Signup and view all the answers

Which of the following is NOT a role of the board of directors?

Developing financial reports Signup and view all the answers

Which of the following is a role of the audit committees of the board of directors?

Reviewing and approving the scope and budget of the internal audit function Signup and view all the answers

Which organization is responsible for setting accounting and auditing standards?

Board of Accountancy Signup and view all the answers

What is the role of the Securities Exchange Commission?

Reviewing filings with the SEC Signup and view all the answers

What is the main responsibility of external auditors?

Performing audits of company financial statements Signup and view all the answers

What is the main responsibility of internal auditors?

Reporting results and analyses to management Signup and view all the answers

Which organization is responsible for ensuring the accuracy of public reporting of financial information for public companies?

Securities Exchange Commission Signup and view all the answers

What is the role of the board of accountancy?

Setting accounting and auditing standards Signup and view all the answers

What is the role of the audit committees of the board of directors in relation to the internal audit function?