Corporate Governance

These interview questions in Corporate Governance will help you to prepare for your next job interview.

Q.1 According to you what are the most critical ethical issues in business today?

The leaders and institutions need to re-conceive of how they build for growth. This requires abandoning the kind of short-term thinking and short-sighted decision making that got into our current economic troubles and instead focus on building a sustainable enterprises. Therefore sustainability is a long-term, integrated platform for innovation, growth and significance that requires a long-term commitment to how a company relates to people, to its communities and to the larger societies that give it permission to operate, and to the environments in which it conducts business.

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Q.2 What do you understand by Corporate Governance?

Corporate governance refers to the structures and processes for the direction and control of companies and concerns the relationships among the management, Board of Directors or Supervisory Board, controlling shareholders, minority shareholders and other stakeholders. Effective corporate governance majorly contributes to sustainable economic development by enhancing the performance of companies and increasing their access to outside capital

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Q.3 Corporate Governance mean the same tithing to everyone, everywhere?

Definitely not , There are mainly two fundamental approaches to governance. 1. The stakeholder model - In this model it assigns rights and responsibilities to a broad group of constituencies, “stakeholders,” including: banks, bondholders, employees, the government and local communities or society at large. 2. The shareholder model - It maintains that ownership is key and therefore the shareholder is the primary focus of governance.

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Q.4 What is the primary objective of Corporate Governance?

Effective corporate governance, helps the corporation function more effectively over the long term, to the benefit of all stakeholders – This is done by identifying, analysing and managing risks; pursuing opportunities; mitigating negative impacts; and therefore by improving triple bottom line performance (planet, people and profit).

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Q.5 Which rewards does good Corporate Governance reap?

Clearly, good corporate governance requires policies, practices, procedures and systems that helps to strengthen the corporation, thereby reaping internal benefits such as clear governance policies, practices and procedures, improved oversight and supervision; sound organizational management; heightened risk awareness; management and mitigation; compliance with regulatory and self-regulatory requirements; appreciation and recognition of corporate citizenship; strong corporate reputation; and good triple-bottom line performance. Such that these internal benefits in turn create and reap external benefits, like better marketing of the corporation’s products and services; liquidity of the corporation’s bonds and shares; maintenance of corporate reputation; and improved access to capital.

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Q.6 What is the use of corporate governance?

Corporate governance is a set of processes, mechanisms, and relations used by different parties to control and operate a corporation.

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Q.7 What are the 4Ps of corporate governance?

Well, the 4P's of corporate governance are people, performance, process and purpose.

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Q.8 Mention the tools of corporate governance.

Some beneficial tools to support corporate governance are: Board portal ESG reporting and data management Board evaluations Directors' and Officers' (D&O) questionnaires

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Q.9 What is the main role of corporate governance?

The major role of corporate governance is to ensure both corporate success and proper economic growth.

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Q.10 Which factors determine good governance?

The eight factors that determine good governance are participation, rule of law, responsiveness, transparency, consensus oriented, effectiveness and efficiency, equity and inclusiveness and accountability.

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Q.11 Name the four models of corporate governance.

The four corporate governance models are: Anglo-American Model Social Control Model The Japanese Model The German Model

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Q.12 What are the principles of corporate governance?

The principles of corporate governance are: Accountability Responsibility Transparency Fairness

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Q.13 What do you mean by a shareholder agreement?

A shareholder agreement is basically an arrangement defining the relationship between shareholders and the company. Moreover, this agreement protects the rights and obligations of the majority and minority shareholders, and ensures fair treatment of all the shareholders.

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Q.14 Mention the objectives of corporate governance.

The objectives of corporate governance include the protection of assets from unauthorized acquisition, motivation of value-maximizing decisions, use or disposition, and the production of proper financial statements

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Q.15 Define control in corporate governance.

Control in corporate governance refers to the policies and procedures used by a firm to ensure compliance with its own moral code.

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Q.16 What is the purpose of internal controls?

The main purpose of internal corporate governance controls is to safeguard assets. These controls are put in place to help prevent asset loss due to mistakes.

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Q.17 What are the elements of the internal control framework?

The five elements of the internal control framework are risk assessment, control environment, control activities, information, communication, and monitoring.

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Q.18 Name some key external corporate governance controls.

Some major external corporate governance controls are government regulations, market competition, media exposure, takeover activities, public release and assessment of financial statements.

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Q.19 What are the different types of shares?

The two primary types of stock are common shares, that represent the majority of shares available across the market, and preferred stock, which guarantee a fixed dividend but don't have voting rights.

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Q.20 What are the types of risks?

Risks are generally of three types: non-business risk, business risk, and financial risk.

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Q.21 What is the main difference between spot and future market?

The major difference between spot and futures prices is that spot prices are for immediate buying and selling, whereas futures contracts delay payment and delivery to predetermined future dates.

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Q.22 What is credit risk?

Credit risk is defined as the potential that a bank borrower or counterparty ought to fail in order to meet its obligations in accordance with the terms that are agreed.

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Q.23 What are the types of audits?

The three types of audits are: internal, external and internal revenue service audits.

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Q.24 What does risk management refer to?

In project management, risk management is the process of identifying, evaluating, and preventing risks to a project that have the power to alter the desired outcomes. Moreover, project managers are typically responsible for overseeing the risk management process during the duration of a given project.

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Q.25 Explain financial auditing.

Financial auditing is the process of examining the financial records of an organization so as to determine if they are correct and in accordance with any applicable rules, regulations, and laws.

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Q.26 What is risk analysis?

Risk analysis is the examination of how project outcomes and objectives may change because of the impact of a risk event. Once these risks are found, they are analyzed to identify the qualitative and quantitative consequences of the risk on the project so that relevant steps can be followed to mitigate them.

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Q.27 What does regular risk monitoring do?

Regular risk monitoring helps provide the management and the board with assurance that established controls are functioning well. The comprehensive MIS reports are essential tools for justifying that the IT operations are performing within the parameters that are established.

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Q.28 Define risk mitigation.

Risk mitigation enables the generation of a sound control environment that decreases the internal and external threats to the tolerance level of institutions and builds a structured environment for IT operations.

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Q.29 What is an external business control?

An external business control is an action that is taken by an outside party impacting the governance of a business.

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Q.30 What do you know about SWOT analysis?

SWOT analysis is a planning methodology used for helping a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition.

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Q.31 What do you mean by industry analysis?

Industry analysis is type of market assessment tool that is used by businesses and analysts for understanding the competitive dynamics of an industry.

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Q.32 What is regression analysis?

Regression analysis includes the identification of the relationship between a dependent variable and one or more independent variables.

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Q.33 What do you understand by competitive analysis?

In marketing and strategic management, competitive analysis is the assessment of the strengths and weaknesses of current and potential competitors.

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Q.34 Define cross shareholding.

Cross shareholding refers to a situation where one publicly-traded organisation holds a significant number of shares of another publicly-traded company.

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Q.35 What is a stock option?

A stock option gives the right to an investor, but not the obligation, to either buy or sell a stock at an agreed upon price and date.

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Q.36 What are the types of options?

The two types of options are calls, which is a bet that a stock will rise or puts, which is a bet that a stock will fall.

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Q.37 What do you mean by cross media ownership?

Cross media ownership occurs when a person or organisation owns outlets in more than one medium in the same geographical market.

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Q.38 What does non-recourse financing mean?

Non-recourse financing implies that the borrowers and shareholders of the borrower don't have any personal liability in the event of monetary default.

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Q.39 What does social accounting refer to?

Social accounting refers to the process of communicating the social as well as environmental effects of an organisation.

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Q.40 Who is a stakeholder?

A stakeholder refers to a party that has an interest in an organisation and can either affect or be affected by the business.

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Q.41 Mention the types of stakeholders.

There are four types of stakeholders including users, influencers, governance and providers.

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Q.42 What are the responsibilities of a stakeholder?

Stakeholders possess legal decision-making rights and can also control project scheduling and budgetary issues. Moreover, they have the responsibility to businesses that include educating developers, creating scheduling parameters, financing projects and setting milestone dates.

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Q.43 What does CSR stand for?

CSR stands for corporate social responsibility that is a form of international private business self-regulation aiming to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in ethically-oriented practices.

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Q.44 Mention the four corporate social responsibilities.

Corporate social responsibility is broken into four categories that are environmental, ethical, philanthropic and economic responsibility.

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Q.45 What are the types of media ownership?

The major types of mass media ownership are chain, cross media, conglomerate and vertical integration.

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Q.46 What is the main purpose of corporate governance?

To separate ownership and management control of organisations and the requirement for increased accountability to stakeholder groups.

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Q.47 Which corporate governance model emphasize the interests of shareholders?

The Anglo-American model

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Q.48 Which country passed FCPA?

United States, the law passed in 1977 that prohibits U.S. firms and individuals from paying bribes to foreign officials in furtherance of a business deal.

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Q.49 What is keiretsu?

A Corporate group composed of manufacturers, supply chain partners, distributors and financiers who remain financially independent. They work closely together to ensure each other's success.

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Q.50 What is the typical duties of boards of directors?

Here are some duties performed by board of directors.
1. Governing the organization by establishing broad policies and objectives
2. Selecting, appointing, supporting and reviewing the performance of the chief executive
3. Ensuring the availability of adequate financial resources

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Q.51 What does the ISO 14000 standard focus on?

It focusses on environmental management, ISO 14000 is a series of environmental management standards developed and published by the International Organization for Standardization (ISO) for organizations.

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