CODE OF CORPORATE GOVERNANCE Flashcards
It refers to the framework of rules, systems and processes in the corporation that governs the performance by the Board of Directors and Management of their respective duties and responsibilities to the stockholders
a. Corporate by-laws c. Corporate governance
b. Articles of incorporation d. Corporate regulation
Which of the following companies is covered by the Revised Code of Corporate Governance?
a. Close corporation c. Barangay Micro Business Enterprise
b. Closely held corporation d. Corporation whose equity securities
Which of the following companies is not covered by the Revised Code of Corporate Governance?
a. Small and Medium Enterprises (SMEs)
b. Corporation that sells equity and/or debt securities to the public that are required to be registered with the SEC
c. Corporation that has assets in excess of P50,000,000 and at least 200 stockholders who own at least 100 shares each of equity securities
d. Corporation that is a grantee of secondary licenses from SEC
How many independent directors must be present in a corporation covered by Revised Code of Corporate Governance?
a. One independent director c. Three independent directors
b. Two independent directors d. Four independent directors
In addition to the qualifications provided by the Corporate Code of the Philippines, what qualifications of a member of the Board of Directors may be provided by the Corporation in accordance to Revised Code of Corporate Governance?
a. Practical understanding of the business of the corporation
b. Membership in good standing in relevant industry, business or professional organizations
c. Previous business experience
d. All of the above
What is the nature of the office of a director?
a. It is one of independence c. It is one of trust and confidence
b. It is one for public interest d. It is one for creditor’s interest
Which of the following is a responsibility of a director of a corporation?
a. He should act in the best interest of the corporation in a manner characterized by transparency, accountability and fairness
b. He should also exercise leadership, prudence and integrity in directing the corporation towards sustained progress
c. Both A and B
d. Neither A nor B
Which of the following is not a responsibility of a director of a corporation?
a. He must conduct fair business transactions with the corporation, and ensure that his personal interest does not conflict with the interests of the corporation
b. He must devote the time and attention necessary to properly and effectively perform his duties and responsibilities
c. He must act injudiciously and exercise judgment dependent on other corporate directors
d. He must have a working knowledge of the statutory and regulatory requirements that affect the corporation, including its articles of incorporation and by-laws, the rules and regulations of the SEC and, where applicable, the requirements of relevant regulatory agencies
Which of the following is a ground for permanent disqualification of a director under the Revised Code of Corporate Governance?
a. Any director charged of crimes involving violation of Securities Regulation Code
b. Any director accused of violation of the Corporation Code
c. Attainment of doctorate degree in a university
d. Conviction by final judgment of an offense punishable by imprisonment for more than six (6) years
Which of the following is a ground for permanent disqualification of a director under the Revised Code of Corporate Governance?
a. Absence in more than 50% of all regular and special meetings of the Board during his incumbency
b. Any director charged of crimes involving violation of Securities Regulation Code
c. Refusal to comply with the disclosure requirements of the Securities Regulation Code and its Implementing Rules and Regulations
d. Any person earlier elected as independent director who becomes an officer, employee or consultant of the same corporation
Which of the following is a ground for temporary disqualification of a director under the Revised Code of Corporate Governance?
a. Any person judicially declared as insolvent
b. Any person found guilty by final judgment or order of a foreign court or equivalent financial regulatory authority of fraudulent acts
c. Any person convicted by final judgment or order by a court or competent administrative body of an offense involving moral turpitude, fraud, embezzlement, theft, estafa, counterfeiting, misappropriation, forgery, bribery, false affirmation, perjury or other fraudulent acts
d. Absence for any 12-month period during his incumbency
He refers to a corporate officer who must monitor compliance by the corporation with Revised Code of Corporate Governance and the rules and regulations of regulatory agencies and, if any violations are found, report the matter to the Board of Directors and recommend the imposition of appropriate disciplinary action on the responsible parties and the adoption of measures to prevent a repetition of the violation
a. Independent director c. Controller
b. Compliance officer d. Treasurer
Statement I: The audit committee refers to an executive committee with the responsibility to assist the Board of Directors in the performance of its oversight responsibility for the financial reporting process, system of internal control, audit process, and monitoring of compliance with applicable laws, rules and regulations
Statement II: The minimum composition of audit committee of a corporation is at least three directors who shall preferably have accounting and finance backgrounds, one of whom shall be an independent director and another with audit experience
a. Both statements are true c. Only Statement II is true
b. Only Statement I is true d. Both statements are false
Statement I: The chairman of the audit committee of a corporation is an independent director
Statement II: The compliance officer reports directly to the Chairman of the board of directors
a. Both statements are true c. Only Statement II is true
b. Only Statement I is true d. Both statements are false
Statement I: The period for submission or filing to SEC of Audited Financial Statements (AFS) of a corporation whose fiscal year ends on a date other than December 31 is within 120 calendar days from the end of fiscal year
Statement II: The General Information Sheet (GIS) of a corporation shall be filed to SEC within 30 calendar days from the date of actual meeting of stockholders or members
a. Both statements are true c. Only Statement II is true
b. Only Statement I is true d. Both statements are false
the governing body elected by the stockholders that exercises the corporate powers of a corporation, conducts all its business and controls its properties.
Board of Directors
a group of executives given the authority by the Board of Directors to implement the policies it has laid down in the conduct of the business of the corporation.
Management
a person who is independent of management and the controlling shareholder, and is free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent judgment in carrying out his responsibilities as a director.
Independent director
a director who has executive responsibility of day-to-day operations of a part or the whole of the organization.
Executive director
a director who has no executive responsibility and does not perform any work related to the operations of the corporation.
Non-executive director
a group of corporations that has diversified business activities in varied industries, whereby the operations of such businesses are controlled and managed by a parent corporate entity.
Conglomerate
a process designed and effected by the board of directors, senior management, and all levels of personnel to provide reasonable assurance on the achievement of objectives through efficient and effective operations; reliable, complete and timely financial and management information; and compliance with applicable laws, regulations, and the organization’s policies and procedures.
Internal control
a process, effected by an entity’s Board of Directors, management and other personnel, applied in strategy setting and across the enterprise that is designed to identify potential events that may affect the entity, manage risks to be within
Enterprise Risk Management
shall cover the company’s subsidiaries, as well as affiliates and any party (including their subsidiaries, affiliates and special purpose entities), that the company exerts direct or indirect control over or that exerts direct or indirect control over the company; the company’s directors; officers; shareholders and related interests (DOSRI), and their close family members, as well as corresponding persons in affiliated companies. This shall also include such other person or juridical entity whose interest may pose a potential conflict with the interest of the company.
Related Party
a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. It should be interpreted broadly to include not only transactions that are entered into with related parties, but also outstanding transactions that are entered into with an unrelated party that subsequently becomes a related party.
Related Party Transactions
any individual, organization or society at large who can either affect and/or be affected by the company’s strategies, policies, business decisions and operations, in general. This includes, among others, customers, creditors, employees, suppliers, investors, as well as the government and community in which it operates.
Stakeholders
