UNIT 1 GOVERNANCE

14. STATEMENT 1: A director with a material or potential interest in any transaction affecting the corporation should fully disclose his adverse interest, abstain from taking part in the deliberations for the same and recuse from voting on the approval of the transaction. STATEMENT 2: The non-executive directors (NEDs) are expected to constructively scrutinize the Management's performance, particularly in meeting the company's goals and objectives. * a. Both statements are TRUE. b. Both statements are FALSE c. Only Statement 1 is TRUE d. Only Statement 2 is TRUE..

a

18. Which of the following is part of an organization's governing body's role in protecting against privacy threats? * a.Establishing a privacy framework b.Identifying the information gathered by the organization that is c.deemed personal or private d.Identifying the methods used to collect information.

a

3. The Board is considered to be an effective instrument of the organization if it has the following, except: a. Working board with good relationship with Related Parties and Community at large b. Risk and crisis management c. Corporate ethics d. Monitoring performance e. Management evaluation, compensation & succession f. Strategy & implementation

a

36. From the PSE Guidelines: STATEMENT 1: Develops and nurtures a culture of ethics, compliance and enforcement. STATEMENT 2: Ensures integrity of financial reports as well as its external auditing function. * a.Both Statements are TRUE b.Both Statements are FALSE c.Only Statement 1 is TRUE d.Only Statement 2 is TRUE.

a

9. SEC MEMORANDUM CIRCULAR NO 24, Series of 2019 CG Code supersedes the following SEC Memorandum Circulars; except: * a. SEC Memo Circular No. 4, Series of 1997 Code of Corporate Governance b. SEC Memo Circular No 6, Series of 2009 Revised Code of Corporate Governance c. SEC Memo Circular No. 9, Series of 2014 Amendment to the Revised Code of CG d. Sec Memo Circular No. 4, Series of 2017, Term Limits of Independent Directors

a

11. The category that is least likely used by the Institute of Corporate Directors (ICD) as designed the Corporate Governance Scorecard for Publicly-listed Companies. a. rights & equitable treatment of shareholders b. rights & duties of shareholders c. role of stakeholders d. disclosure & transparency e.Board responsibilities

b

21. Board committees should be set up to the extent possible to support the effective performance of the Board's functions. What are the SEC's recommended board committees? a.Audit, Corporate Governance, Nominating & Investment b.Audit, Corporate Governance, Risk Oversight c.Audit, Corporate Governance, Risk Oversight and Compliance d.Audit, Risk Oversight and Compliance

b

23. Is a system of stewardship and control to guide organizations in fulfilling their long-term economic, moral, legal and social obligations towards their shareholders/members and other stakeholders. * a.Code of Corporate Governance b.Corporate governance c.Those Charged with Governance d.Board of Directors

b

25. SEC Memo Circular Series No. 24 adopted this approach which combines voluntary compliance with mandatory disclosure. * a.Appreciative approach b.Comply & Explain Approach c.One size fits all framework d.Enterprise Risk Management

b

27. The pillar which is considered as the heart of business. a.Leadership strategy & culture b.Risk c.Management information & controls d.Transparency & reporting e.Structure & performance oversight

b

28. The core concept of corporate governance that describes the clear definition of roles and authorities of stakeholders; the duties & responsibilities of the Board and how the Board is structured with appropriate composition, procedures & policies, and finally, the business ethics. a.Control Environment b.Good board practices c.Board commitment d.Stakeholder interface

b

30. Which of the following is most likely considered as the bedrock of successful business with good governance? * a.Leadership, transparency and disclosure b.Leadership, management and accountability c.Leadership, management and board commitment d.Leadership, communication and risk

b

6. The one who is primarily responsible to the corporation and its shareholders/members, and not to the Chairperson or President of the Corporation. a. Chair of the Board b. Corporate Secretary c. President of the Board d. Chief Executive Officer

b

1. Below are combinations of core concepts of corporate governance, which of this is not the right combination? * A. Accountability, fairness & transparency B. Independence, Sustainability & Openness C. Stakeholder interface, reputation & good board practices D. Control environment, board commitment & communication E. Board commitment, prudence & openness

d

13. One of the key governance roles describe aspects such as: operating the corporation, annual operating plans and budget, strategic planning, identify and management risks, accurate and transparent financial reporting and disclosures. What key governance role is it referred to? * a. Chief risk officer b. Chief compliance officer c. General counsel d. CEO and Senior Executives

d

20. The Board composition & structure, according to SEC Corporate Governance Code.. a.5 to 15 members with at least 2 independent directors b.5 to 15 members or 20% independent directors c.5 or 15 members with 2 or 20% independent directors, whichever is higher d.5 or 15 members with 2 or at least 1/3 of the members of the Board, whichever is higher.

d

24. The Code of Corporate Governance for public companies and registered issuers is arranged as follows : (in correct order) a.Principles, Definition of terms and Explanations b.Definition of Terms, Principles and Recommendations c.Principles, Responsibilities, Definition of terms d.Principles, Recommendations and Explanations

d

26. An interest, participation or privilege over a specific property of a corporation that allows the holder to use such property under certain terms and conditions. The holder, however, shall not be entitled to dividends from the corporation or to its assets upon its liquidation. * a.Non-executive director b.Proprietary right c.Registered issuer d.Non-proprietary right

d

29. Which of the following is least likely part of the PSE Guidelines? * a.Have a clearly defined vision, mission and core values. b.Have a board composed of directors of Al proven competence and integrity. c.Have Audit, Risk, Governance and' Nomination and Election Committees. d.Have a corporate secretary and corporate treasurer.

d

31. Which of the 9 Cs of Leadership is described here: It is a quality that makes people want to follow the leader, the ability to inspire and generate trust? * a.Communication b.Creative c.Competence d.Charisma

d

32. Below are parameters for judging good Corporate Governance, which is least likely part of this list? * a.Socially responsive organization b.Ability to attract, manage and retain talent c.Has a global competitiveness d.Believes in in customer satisfaction and has self-confidence e.Ability to create value to stakeholders f.Has a record of steady corporate performance

d

34. The governance process is also referred to as the way in which an organization chooses to conduct its affairs to meet 4 key responsibilities. Which of the following is a part of those responsibilities? (I) Complying with society's legal & regulatory rules (II) Satisfying the generally accepted business norms of society (Ill) Providing overall benefit to society & enhancing the interests of the specific stakeholders (IV) Reporting fully & truthfully to its owners, regulators, other stakeholders & general public. a.I and II only b.II and IV only c.I, Ill and IV only d.I, II, III and IV

d

5. The key governance roles of the Board are enumerated below, except: a. Operates the corporation in an effective and ethical manner. b. Oversees organizational activities c. Establishes the lone at the top' & serves as the focal point for all governance activities. d. Assumes ultimate accountability & responsibility for the performance & affairs of the organization, effective risk management practices, and setting the risk appetite level.

d

7. OECD Principles of Corporate Governance are the following: (I) Responsibilities of the Board (II) Role of stakeholders in corporate governance (Ill) ensuring the basis for an effective corporate governance framework (IV) Rights of shareholders & key ownership functions (V) Equitable treatment of shareholders (VI) Disclosure & transparency (VII) Ensure the accountability of certain individuals in an organization. a. I, II, III, IV and V only b. I, II, V, VI and VII only c. I, II, III, VI and VII only d. I, II, III, IV, V and VI only

d

33. PSE provided a number board committees to be created in a publicly listed corporation in the Philippines. Which is not among this list? * a.Audit b.Governance c.Risk d.Nomination and Election e.Ethics and compliance

e

35. SEC Memo Circular 24 revised the main sections stated in this memo, which is least likely part of the table of content? * a.Board's governance responsibilities b.Internal Control & risk management frameworks c.Duties of stakeholders d.Cultivating a synergic relationship with shareholders/members e.Sound business strategy

e

10. SEC Memo Circular No. 24, Series of 2019 covered the following entities a. Registered corporation b. Registered corporation & branches or subsidiaries of foreign corporations c. Public companies and registered issuers d. Publicly listed corporations and Registered corporation

c

10A. SEC Memo Circular No. 24, Series of 2019 requires those entities covered by this circular to submit a new Manual of Corporate Governance within months from the effectivity of this Memo Circular. a. 12 months b. 9 months c. 6 months d. 10 months

c

12. Below are OECD Principles of Corporate Governance. Which one is not part of it? * a. Ensuring the basis of corporate governance framework b. Ensuring timely & accurate disclosure is made on all material matter regarding the corporation c. Ensuring the shareholder's rights & duties, and the board's responsibilities d. Equitable treatment of shareholders including minority shareholders e. Effective monitoring of management by the board, & the board's accountability to the company & shareholders.

c

15. STATEMENT 1: The best measure of the Board's effectiveness is through an assessment process. STATEMENT 2: Disclosure of the criteria, process and individual and collective results of the assessment are confidential in nature. * a.Both statements are TRUE b.Both statements are FALSE c.Only Statement 1 is TRUE d.Only Statement 2 is TRUE

c

16. STATEMENT 1: The main responsibility to create and design a Code of Business Conduct and Ethics suitable to the needs of the company and the culture by which it operates lies with the Senior Executives. STATEMENT 2: The company's corporate governance policies, programs and procedures should be contained in its Manual on Corporate Governance, which should be submitted to the Commission and posted on the company's website. * a.Both statements are TRUE. b.both statement are FALSE c.ONLY statement 1 is TRUE d.ONLY statement 2 is TRUE.

c

17. Which of the following represents the best governance structure under the following order (I) Operating Management, (II) Internal Auditing, and (III) Executive Management? a.(I) Responsibility for risk, (II) Oversight role and (III)Advisory role b.(I) Oversight role, (II) Responsibility for risk and (III) Advisory role c.(I) Responsibility for risk, (II) Advisory role, (III)Oversight role d.(I) Oversight role, (II) Advisory role and (III) Responsibility for risk

c

19. Which group is charged with overseeing the establishment, administration & evaluation of the processes of risk management & control? * a.Operating managers b.Internal auditors c.Senior Executives or management d.External auditors

c

2. An organization's management is most likely not accountable to a.Regulators b.The public c. Competitors d. Shareholders e. Creditors

c

22. This refers to 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. a.Shareholders b.Management and all members of the organization c.Stakeholders d.Investors e.Regulators

c

4. Audits in governance that is related to planning to acquire, manage or consolidate with other businesses, starting joint ventures and environmental audits. * a. Strategic audit b. Internal audit c. Due diligence audit d. Governance audit

c

8. Corporate governance (CG) in the Philippines can be traced in the following intervening events, except: * a. Active partnership of key regulators such as SEC, BSP, PSE and ICD, an advocacy group. b. The Asian financial crisis in 1997 led to key initiatives to improve the CG in the Philippines c. CG includes the relationships among the many stakeholders involved & the goals for which the corporation is governed. d. Manuals & scorecards & creation of Board audit and governance committees.

c