SBL Governance and sustainability

Which theory suggests that managers, as agents, may pursue their own interests rather than those of the owners?

• 1 Stakeholder theory
• 2 Agency theory
• 3 Contingency theory
• 4 Stewardship theory

Under a principles based approach to corporate governance, a company that does not follow a provision is usually expected to:

• 1 Explain the reason for departing from it
• 2 Appoint a new auditor
• 3 Stop trading until it complies
• 4 Pay a fine

Which committee is mainly responsible for reviewing the integrity of financial statements and the external audit process?

• 1 Risk management executive
• 2 Nominations committee
• 3 Audit committee
• 4 Remuneration committee

The role of the remuneration committee is mainly to:

• 1 Approve the budget
• 2 Appoint the external auditor
• 3 Set the pay policy for executive directors, linked to long-term performance
• 4 Select the new directors

Combining the roles of chair and chief executive in one person is criticised mainly because it:

• 1 Increases the cost of the board
• 2 Prevents the use of committees
• 3 Concentrates power and reduces independent challenge
• 4 Is illegal in all countries

A mapping of stakeholders by power and interest classifies a group with high power and low interest as one to:

• 1 Monitor with minimal effort
• 2 Manage closely
• 3 Keep satisfied
• 4 Keep informed

Sustainability reporting that follows the idea of the triple bottom line reports performance on:

• 1 Economic, social and environmental measures
• 2 Profit, loss and cash
• 3 Costs, revenue and tax
• 4 Assets, liabilities and equity

A company claims that its products are environmentally friendly but has no evidence to support the claim. This is an example of:

• 1 Materiality assessment
• 2 Greenwashing
• 3 Integrated reporting
• 4 Stewardship