Test Prep / IB Practice Test - 11/21/2025

IB Practice Test - 11/21/2025

Corporate Governance Exam10 Questions20 min

IB Practice Test - 11/21/2025

A practice test for IB

10Questions

20Minutes

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This practice test is designed to help you prepare for the IB exam. It contains 10 questions and has a time limit of 20 minutes.

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Important Questions

What is the main difference between the agency theory and stakeholder theory in corporate governance?

A:Agency theory focuses on shareholders and stakeholder theory considers all stakeholders

B:Agency theory emphasizes social responsibility and stakeholder theory emphasizes profits

C:Agency theory supports long-termism and stakeholder theory supports short-termism

D:Agency theory is based on management theories and stakeholder theory on economic theories

Which corporate governance approach requires directors to balance conflicting stakeholder interests in the best interests of the company?

A:Enlightened shareholder value approach

B:Inclusive stakeholder approach

C:Shareholder value approach

D:Stakeholder approach

According to corporate governance principles, which of the following is NOT one of the four widely agreed underlying principles?

A:Fairness

B:Accountability

C:Profit Maximization

D:Transparency

In the UK, which type of company is legally required to appoint a company secretary?

A:Public companies

B:Private companies

C:Both public and private companies

D:Limited liability partnerships

What is the primary role of the company secretary in corporate governance?

A:Acting as an impartial adviser on governance to the whole board

B:Managing the company’s financial accounts

C:Setting company strategy

D:Making executive decisions

According to the UK Corporate Governance Code, what percentage of the board, excluding the chair, should be independent non-executive directors?

A:At least 50%

B:One-third

C:At least 25%

D:100%

Which of the following is NOT typically a role of a company’s audit committee?

A:Monitoring the integrity of financial statements

B:Overseeing internal controls and risk management systems

C:Setting the company's executive remuneration

D:Reviewing the effectiveness of internal and external audits

What is the purpose of a company’s strategic report under the UK Companies Act 2006?

A:To provide shareholders with information on how the directors have fulfilled their duty to promote company success

B:To present audited financial statements

C:To appoint directors and auditors

D:To finalize dividend payments

Which of the following best describes the main function of integrated reporting?

A:Combining financial and non-financial information to report on value creation over time

B:Separating financial statements from ethical reports

C:Reporting solely on environmental impact

D:Excluding financial performance from sustainability reports

According to the 2018 UK Corporate Governance Code, which of the following must a board assess and monitor?

A:Corporate culture

B:Employee salary ranges

C:Foreign operations

D:Shareholder composition

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