Corporate Governance Sample Questions

Sample Questions

1. Corporate governance can be defined as.

A. the economic, legal, and institutional framework in which corporate control and cash flow rights are distributed among shareholders, managers and other stakeholders of the company.

B. the general framework in which company management is selected and monitored.

C. the rules and regulations adopted by boards of directors specifying how to manage companies.

D. the government-imposed rules and regulations affecting corporate management.

2. Corporate governance structure.

A. varies a great deal across countries.

B. has become homogenized following the integration of capital markets.

C. has become homogenized due to cross-listing of shares of many public corporations.

D. None of the above

3. In a public company with diffused ownership, the board of directors is entrusted with.

A. monitoring the auditors and safeguarding the interests of shareholders.   

B. monitoring the shareholders and safeguarding the interests of management.

C. monitoring the management and safeguarding the interests of shareholders.

D. None of the above

4. The central issue of corporate governance is.

A. how to protect creditors from managers and controlling shareholders.     

B. how to protect outside investors from the controlling insiders.

C. how to alleviate the conflicts of interest between managers and shareholders.

D. how to alleviate the conflicts of interest between shareholders and bondholders.

5. Corporate social responsibility concerns

A. How an organisation meets the expectations of its stakeholders.

B. The behaviour of individual managers.

C. External stakeholder relationships.

D. The ways in which an organisation exceeds its minimum required obligations to stakeholders.


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