Corporate Governance

Question 1

What is the role of the board of directors?

Answer 1

The board of directors oversees the management of a company, makes high-level decisions, and represents shareholders.

Question 2

What are executive directors?

Answer 2

Executive directors are part of the company’s management and are involved in day-to-day operations.

Question 3

What are non-executive directors?

Answer 3

Non-executive directors are independent board members who are not part of management and provide an unbiased perspective.

Question 4

What is the primary duty of the board of directors?

Answer 4

The primary duty of the board is to oversee the company’s management, set strategic direction, and ensure accountability.

Question 5

What rights do shareholders have?

Answer 5

Shareholders have rights such as voting at the AGM, receiving dividends, inspecting company records, and suing for wrongful acts.

Question 6

What is the separation of ownership and control in corporate governance?

Answer 6

It refers to the distinction between shareholders (owners) and management (controllers), with the board acting as an intermediary.

Question 7

What does accountability mean in corporate governance?

Answer 7

Accountability ensures that a company’s leadership is responsible for their actions to shareholders and other stakeholders.

Question 8

What is transparency in corporate governance?

Answer 8

Transparency involves open disclosure of company operations, policies, and performance to shareholders and stakeholders.

Question 9

What does fairness mean in corporate governance?

Answer 9

Fairness means treating all stakeholders, including minority shareholders, equally and avoiding conflicts of interest.

Question 10

What is the role of responsibility in corporate governance?

Answer 10

Responsibility refers to protecting the interests of stakeholders and ensuring legal and ethical conduct.

Question 11

What is independence in corporate governance?

Answer 11

Independence refers to the board making decisions free from management influence, especially through independent directors.

Question 12

What is the Anglo-American model of corporate governance?

Answer 12

It focuses on shareholders as primary stakeholders, emphasizing shareholder rights, transparency, and board accountability.

Question 13

What is the German model of corporate governance?

Answer 13

The German model uses a two-tier board system (Management and Supervisory Boards), with employee representation.

Question 14

What is the Japanese model of corporate governance?

Answer 14

The Japanese model focuses on long-term growth and stakeholder welfare, often involving interlinked companies (keiretsu).

Question 15

What is the Sarbanes-Oxley Act (SOX)?

Answer 15

A U.S. law that regulates corporate governance and financial practices, introduced after scandals like Enron.

Question 16

What are the key provisions of the Sarbanes-Oxley Act?

Answer 16

CEO and CFO certification of financial statements, stronger internal controls, and timely disclosure of material changes.

Question 17

What is the Dodd-Frank Act?

Answer 17

A U.S. law passed after the 2008 financial crisis to regulate financial markets and improve transparency and accountability.

Question 18

What are the OECD Principles of Corporate Governance?

Answer 18

A set of international guidelines for corporate governance focused on transparency, board responsibilities, and shareholder rights.

Question 19

What is Corporate Social Responsibility (CSR)?

Answer 19

CSR refers to a company’s responsibility to contribute positively to society beyond obligations to shareholders.

Question 20

What is Environmental, Social, and Governance (ESG)?

Answer 20

ESG refers to criteria used to assess a company’s performance in environmental, social, and governance areas.

Question 21

What does the environmental component of ESG focus on?

Answer 21

The environmental component focuses on issues such as climate change, waste management, and natural resource use.

Question 22

What does the social component of ESG focus on?

Answer 22

The social component focuses on employee treatment, diversity, human rights, and customer relations.

Question 23

What does the governance component of ESG focus on?

Answer 23

The governance component focuses on board composition, executive compensation, anti-corruption measures, and shareholder rights.

Question 24

What is a conflict of interest in corporate governance?

Answer 24

A conflict of interest occurs when individuals have competing personal or financial interests that may interfere with objective decision-making.

Question 25

What is insider trading?

Answer 25

Insider trading involves the illegal buying or selling of a company’s stock using confidential, non-public information.

Question 26

What is executive compensation in corporate governance?

Answer 26

Executive compensation refers to the financial and non-financial rewards given to top executives, often scrutinized for fairness.