UNIT 1

Question 1

an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incidental to its existence

Answer 1

Corporation

Question 2

it may, under its corporate name, take, hold, or convey property to the extent allowed by law, enter into contracts, and sue or be sued.

Answer 2

Separate legal entity – artificial being

Question 3

A corporation is generally created by

Answer 3

Created by operation of law

Question 4

Irrespective of the death, withdrawal, insolvency, or incapacity of the individual members or shareholders, and regardless of the transfer of their interest of share capital, a corporation shall have perpetual existence unless its articles of incorporation provides otherwise.

Answer 4

Right of succession

Question 5

Revised Corporation Code of the Philippines

Answer 5

RA 11232

Question 6

Proprietorship in a corporation is divided into units known as

Answer 6

Share Capital

Question 7

the governing body or decision-making body of the corporation

Answer 7

Board of Directors

Question 8

the governing body elected by the stockholders that exercises the corporate powers of a corporation, conducts all its business

Answer 8

Board of Directors

Question 9

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.

Answer 9

Management

Question 10

stockholders or members mentioned in the Articles of Incorporation as
originally forming and composing the corporation and who are signatories thereof.

Answer 10

Incorporators

Question 11

They must be natural persons as distinguished from artificial persons.

Answer 11

Incorporators

Question 12

enumerate the powers and limitations conferred upon the corporation by the government.

Answer 12

Articles of Incorporation

Question 13

those who compose a corporation, whether as stockholders or shareholders in a stock corporation or as members in a nonstock corporation.

Answer 13

Corporators

Question 14

they are the corporators of a stock corporation

Answer 14

Stockholders/Shareholders

Question 15

a private corporation in which the capital is divided into shares of stock and is authorized to distribute corporate earnings to holders on the basis of shares held.

Answer 15

stock corporation

Question 16

they are the corporators of a non-stock corporation.

Answer 16

members

Question 17

they are the corporators of a non-stock corporation.

Answer 17

Members

Question 18

they are the persons who undertake to (a) form a company based on a given project, (b) set it going, (c) take the necessary steps to accomplish the purpose for which the corporation is organized.

Answer 18

Promoters

Question 19

they are the persons who have agreed to take original, unissued shares but will pay at a later date.

Answer 19

Subscribers

Question 20

They may be incorporators or not and they may eventually become shareholders the moment the full payment of their subscriptions is made.

Answer 20

subscribers

Question 21

they are those who undertake to dispose of the shares to the general public

Answer 21

underwriters

Question 22

process whereby elements in society wield power, authority and influence and enact policies and decisions concerning public life and social upliftment.

Answer 22

governance

Question 23

comprises all the processes of governing – whether undertaken by the government of a country, by a market or by a network – over a social system and whether through the laws, norms, power, or language of an organized society.

Answer 23

governance

Question 24

the process of decision-making and the process by which decisions are implemented (or not implemented) through the exercise of power or authority by leaders of the county and/or the organization

Answer 24

governance

Question 25

important to point out that representative democracy does not necessarily mean that the concern of the most vulnerable in society would not be taken into consideration in decision making.

Answer 25

participation

Question 26

This means freedom of association and expression on one hand and an organized civil society on the other hand.

Answer 26

participation

Question 27

Good governance requires fair legal frameworks that are enforced impartially.

Answer 27

rule of law

Question 28

requires full protection of human rights, particularly those of minorities.

Answer 28

Rule of Law

Question 29

decisions taken and their enforcement are done in a manner that follows rules and regulations

Answer 29

transparency

Question 30

information is freely available and directly accessible to those who will be affected by such decisions and their enforcement

Answer 30

transparency

Question 31

enough information is provided and that it is provided in easily understandable forms and media.

Answer 31

tranparency

Question 32

Good governance requires that institutions and processes try to serve the needs of all stakeholders within a reasonable timeframe.

Answer 32

responsiveness

Question 33

Act promoting ease of doing business and efficient delivery of government services.

Answer 33

RA 11032

Question 34

Good governance requires mediation of the different interest in society to reach a broad consensus on what is in the best interest of the whole community and how this can be achieved.

Answer 34

Consensus Oriented

Question 35

also requires a broad and long-term perspective on what is needed for sustainable human development and how to achieve the goals of such development.

Answer 35

Consensus Oriented

Question 36

Good governance ensures that all its members feel that they have a stake in it and do not feel excluded from the mainstream of society.

Answer 36

Equity and Inclusiveness

Question 37

This requires all groups, but particularly the most vulnerable, have opportunities to improve or maintain their well-being.

Answer 37

Equity and Inclusiveness

Question 38

Good governance means that processes and institutions produce results that meet the needs of society while making the best use of resources at their disposal.

Answer 38

Effectiveness and Efficiency

Question 39

the sustainable use of natural resources and the protection of the environment

Answer 39

Effectiveness and Efficiency

Question 40

cannot be enforced without transparency and the rule of law.

Answer 40

accountability

Question 41

Not only governmental institutions but also the private sector and civil society organizations must be accountable to the public and to their institutional stakeholders.

Answer 41

Accountability

Question 42

defined as the system of rules, practices, and processes by which business corporations are directed and controlled.

Answer 42

Corporate Governance

Question 43

involves balancing the interests of a company’s many stakeholders, such as shareholders, management, customers, suppliers, financiers, government, and the community.

Answer 43

corporate governance

Question 44

the system of stewardship and control to guide organizations in fulfilling their long-term economic, moral, legal, and social obligations towards their stakeholders

Answer 44

corporate governance

Question 45

system of direction, feedback and control using regulations, performance standards and ethical guidelines to hold the Board and senior management accountable for ensuring ethical behavior – reconciling long-term customer satisfaction with shareholder value – to the benefit of all stakeholders and society.

Answer 45

corporate governance

Question 46

T/F The purpose of corporate governance is to facilitate effective, entrepreneurial and prudent management that can deliver long-term success of the company.

Answer 46

TRUE

Question 47

T/F The fundamental aim of corporate governance is to enhance shareholders’ value and protect the interests of other stakeholders by improving the corporate performance and accountability.

Answer 47

TRUE

Question 48

T/F the purpose of corporate governance to minimize the organization’s long- term success, creating sustainable value for its shareholders, stakeholders and the nation.

Answer 48

FALSE

Question 49

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.

Answer 49

Stakeholders

Question 50

All shareholders deserve equitable treatment and this equity is safeguarded by a good governance structure in any organization

Answer 50

Fair and Equitable Treatment of Shareholders

Question 51

In some organizations, a group of high net-worth individual and institutions who have a substantial proportion of their portfolios invested in the company remain active through occupation of top-level positions that enable them to guard their interest.

Answer 51

Fair and Equitable Treatment of Shareholders

Question 52

Corporate governance enables firms to assess their behavior and actions before they are scrutinized by regulatory agencies.

Answer 52

Self-assessment

Question 53

An active and independent board can successfully point out deficiencies or loopholes in the company operations and help solve issues internally on a timely basis.

Answer 53

Self-assessment

Question 54

Corporate governance also aims to protect the long-term interests of the shareholders

Answer 54

Increase Shareholders’ Wealth

Question 55

This only reflects the positive perception that good corporate governance induces potential investors to decide to invest in a company.

Answer 55

This only reflects the positive perception that good corporate governance induces potential investors to decide to invest in a company.

Question 56

Good corporate governance aims at ensuring a higher degree of transparency in an organization by encouraging full disclosure of transactions in the company accounts.

Answer 56

Transparency and Full Disclosure

Question 57

T/F Effective corporate governance is transparent, protects the rights of shareholders and includes operational risk management only.

Answer 57

FALSE | both strategic and operational risk management only

Question 58

concerned in both the long-term earning potential as well as actual short-term earnings and holds directors accountable for their stewardship of the business.

Answer 58

Effective Corporate Governance

Question 59

Does the board meet the information needs of investment communities?

Answer 59

Transparency and Full Disclosure

Question 60

Does it safeguard integrity in financial reporting?

Answer 60

Transparency and Full Disclosure

Question 61

Does the board have sound disclosure policies and practices?

Answer 61

Transparency and Full Disclosure

Question 62

Does the board clarify its role and that of management?

Answer 62

Accountability

Question 63

Does it promote objective, ethical and responsible decision making?

Answer 63

Accountability

Question 64

Does the composition mix of board membership ensure an appropriate range and mix of expertise, diversity, knowledge and added value?

Answer 64

Accountability

Question 65

Has the board built long-term sustainable growth in shareholders’ value for the corporation?

Answer 65

Corporate Control

Question 66

Are conflicts of interest avoided such that the organization’s interests prevail at all times?

Answer 66

Corporate Control

Question 67

Code of Corporate Governance for publicly-listed companies

Answer 67

Securities and Exchange Commission (SEC) Memorandum Circular No. 19, Series of 2016

Question 68

Its goal is to help companies develop and sustain an ethical corporate culture and keep abreast with recent developments in corporate governance.

Answer 68

Securities and Exchange Commission (SEC) Memorandum Circular No. 19, Series of 2016

Question 69

Securities and Exchange Commission (SEC) Memorandum Circular No. 19, Series of 2016 Approval Date: ???

Answer 69

November 10, 2016