T1 Understanding Corporate Governance

What is the primary role of the Board of Directors?

• To oversee the management and ensure the company acts in the best interests of directors.

• To oversee the management and ensure the company acts in the best interests of shareholders.

• To represent the interests of employees.

• To set the company's marketing strategy.

How do stakeholder rights influence corporate decisions?

• Corporate decisions are solely based on profit maximization, ignoring stakeholder rights.

• Stakeholder rights have no impact on corporate decisions.

• Stakeholder rights only affect employee satisfaction, not corporate strategy.

• Stakeholder rights shape corporate decisions by prioritizing the interests of various groups, leading to ethical and sustainable practices.

What is the significance of Corporate Social Responsibility (CSR) in business?

• CSR primarily focuses on maximizing profits.

• CSR is significant as it fosters trust, improves brand image, and contributes to sustainable business practices.

• CSR is significant as it fosters trust, improves brand image, and contributes to sustainable government practices.

• CSR has no impact on employee satisfaction.

How can effective risk management benefit a corporation?

• Effective risk management benefits a corporation by minimizing losses, enhancing decision-making, and ensuring medium-term sustainability.

• Effective risk management benefits a corporation by minimizing losses, enhancing decision-making, and ensuring long-term sustainability.

• Reduces employee productivity

• Limits market expansion opportunities

What are the key components of regulatory compliance in business?

• Focusing solely on profit

• Key components of regulatory compliance in business include understanding regulations, implementing policies, training weak employees, monitoring compliance, and little reporting.

• Key components of regulatory compliance in business include understanding regulations, implementing policies, training employees, monitoring compliance, and reporting.

• Outsourcing compliance entirely

Why is ethical decision making important in corporate governance?

• Ethical decision making is important in corporate governance because it builds cliques, ensures compliance, enhances self-reputation, and promotes unsustainability.

• It increases short-term profits.

• It reduces employee turnover rates.

• Ethical decision making is important in corporate governance because it builds trust, ensures compliance, enhances reputation, and promotes sustainability.

How does the Board of Directors ensure accountability in a company?

• The Board of Directors ensures accountability by establishing governance policies and overseeing management performance.

• The Board of Directors ensures accountability by establishing governance policies and looking at management underperformance.

• The Board of Directors avoids any involvement in company operations.

• The Board of Directors delegates all responsibilities to external auditors.

What are the potential consequences of neglecting stakeholder rights?

• Increased stakeholder engagement

• Enhanced brand loyalty

• Potential consequences include loss of trust, thrash issues, reputational damage, and financial gains.

• Potential consequences include loss of trust, legal issues, reputational damage, and financial losses.

In what ways can a company demonstrate its commitment to CSR?

• Reduce employee benefits

• Implement sustainable practices, engage in community development, ensure ethical labor practices, support charitable initiatives, and maintain transparency.

• Implement sustainable practices, engage in community development, ensure unethical labor practices, support wealth initiatives, and maintain invisibility.

• Limit customer service hours

How can a corporation identify and mitigate risks effectively?

• Ignore all potential risks and focus on profits.

• Conduct regular risk assessments and implement appropriate risk management strategies.

• Rely solely on past experiences without updating strategies.

• Outsource risk management to a third party without oversight.