1.

What function does a board perform and how does this contribute to the corporate
governance of the company?
2. Non-executive directors are waste of time. They often have little involvement with a
company and are not aware of what is really going on critically discuss this statement?
3. Corporate governance practices around the world are converging- Critically discuss
4.
5.

6.
7.
8.
9.

using the forces of convergence and differentiation.

In what ways might stakeholders interests conflict with each other?
A companys long-term success is dependent on stakeholders, therefore it can
no more fail to take stakeholders interests into consideration than it can those of
its shareholders Critically discuss this statement in the light of corporate
governance theories? (2013)
Do you think that investors should be willing to sacrifice financial return, if
necessary, in order to have a portfolio that is comprised of socially responsible
investment? Why?
What are the agency problems in the context of Limited Liability Company? How
these problems can be tackled from the agency theory perspective? Give
examples. RESIT
One size fits all. Critically discuss this statement indicating whether it would be
desirable and possible to have one model of corporate governance applicable to
all countries. RESIT
CSR is the first casualty in an economic downturn as companies will choose to
cut back on this area critically discuss this statement in the light of the global
financial crisis and the potential implications for the socially responsible
investment of institutional investors. RESIT

10. Discuss the conformance and performance aspects of governance

with respect to board responsibilities. (2015)
11. Critically discuss agency theory, stewardship theory and stakeholder
theory (20!5)
12. Critically discuss the unitary board system and a dual board system.
(2015)
13. ) Why has the influence of institutional investors grown so much in
recent years, and what role do you think institutional investors
should play in corporate governance? (2015)
14. Discuss the importance of independence of non-executive directors
on the board.
15. Corporate governance practices around the world are convergingCritically discuss using the forces of convergence and differentiation.
16. Corporate governance practices around the world are convergingCritically discuss using the forces of convergence and differentiation.

1. In the UK, the Combined Code of 1998 drew together the recommendations of
the following reports:
a. The Cadbury Report, the Greenbury Report, and the Walker Report.
b. The Cadbury Report, the Turnbull Report, and the Walker Report.
c. The Cadbury Report, the Greenbury Report, and the Turnbull Report.
d. The Cadbury Report, the Greenbury Report, and the Hampel Report.
e. None of the above.
(2 marks)
2. Which of the following is true about the role of the chairman?
a. He/she should have all the power to make decisions related to the benefit
of the directors only
b. Responsible for running the board
c. Responsible for running the operations of the company
d. Combined Code 2008 says that the roles of the chairman and chief
executive officer should be exercised by the same individual
(2 marks)
3. The directors in a unitary board are selected by whom?
a. Shareholders at the annual general meeting
b. Employees at the annual general meeting
c. Non-executive directors
d. D. Nomination committee
(2 marks)
4. Which of the following is correct about describing independence?
a. the chairman and the CEO are the same individuals
b. non-executive director has a material business relationship with the
company
c. the non-executive director has close family ties with the company's other
directors and advisors
d. the non-executive director was a former employee of the company in the

last five years

e. no relationship or circumstances which could affect the non-executive
directors judgement
(2 marks)
(Section A continues on the next page)
BFBL604/SM/S2/1415 Page 3 of 5
5. The board structure in UK and US is predominantly
a. Dual board
b. Two tier board
c. Unitary board
d. Board of Governors
(2 marks)
6. A company must develop relationships relevant to its success and this will
include employees, suppliers, customers, lenders, communities, and government.
This is called
a. Shareholder Theory
b. Stakeholder Theory
c. Post- Enron Theory
d. Principal Agent Theory
e. Stewardship Theory
(2 marks)
7. The Higgs Review (2003) in the UK provides detailed guidelines of the
characteristics that grant non-executive directors independence. Which of the
following characteristics include disqualifying a potential board member as
independent?
a. A former employee of the company or group with less than five years of
employment
b. Having close family ties with any of the companys advisers, directors or
senior employees
c. Having served on the board for more than ten years

d. Represents a significant shareholder

e. All of the above
f. None of the above
(2 marks)
(Section A continues on the next page)
BFBL604/SM/S2/1415 Page 4 of 5
8. The most developed system for employee participation in corporate decision
making is demonstrated by the following:
a. Co-determination rule in German two tier public companies
b. Sarbanes Oxley Act in United States
c. The Tabalansk Code in Netherlands
d. The Kings Report in South Africa
(2 marks)
9. In the UK, Companies Act 2006 requires directors to focus on enlightened
shareholder value. This means:
a. Good governance can improve the boards ability to manage the company
effectively to deliver short term success as well as provide accountability
to the shareholders
b. The effectiveness with which boards discharge their responsibilities
determines its competitive position.
c. A regulatory framework that aims to improve standards of corporate
governance.
d. Boards must ensure that the business is sustainable and to take account
of long-term consequences in setting business model and strategies.
(2 marks)
10.The UK regulatory framework is best described as:
a. Insider orientation
b. Bank-based approach
c. Market-based approach
d. Pyramid structures

(2 marks)
Total (20 marks)

1. Transaction cost economics views the firm as a

a. Nexus of contracts
b. Separation of ownership and control
c. Not a substitute for the market
d. Governance structure
e. Maximisation of shareholder value
2. Which of the following best describes the work of Berle and Means (1932)?
a. Commencement of the transactional cost economics
b. Important to the development of agency theory
c. First to explore the structural and strategic implications of the
separation of ownership and control
d. Ownership is concentrated
e. None of the above
3. The UK regulatory framework is best described as:
a.

Insider orientation

b.

Bank-based approach

c.

Market-based approach
d.

Pyramid structures

4. The most developed system for employee participation in corporate decision

making is demonstrated by the following:
a.

Co-determination rule in German two tier public companies

b.

Sarbanes Oxley Act in United States

c.

The Tabalansk Code in Netherlands

d.

The Kings Report in South Africa

5. Which of the following is true about the role of the chairman?

a. He/she should have all the power to make decisions related to the
benefit of the directors only
b. Responsible for running the board
c. Responsible for running the operations of the company
d. Combined Code 2008 says that the roles of the chairman and chief
executive officer should be exercised by the same individual