StudyXY
RegisterLog in
Test Prep / IB Practice Test

IB Practice Test

Corporate Governance Exam10 Questions20 min
Corporate Governance ExamIB

IB Practice Test

Practice test for Corporate Governance Exam

10Questions
20Minutes
i

About This Test

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.

Take it now

Start the test directly on this page without signing in

Create Your Own Tests

Track your progress and save results over time

Sign In to Create Own Exam to Study

Important Questions

Log in to view all
1

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

A:Agency theory focuses on shareholders' interests; stakeholder theory considers all interested groups’ interests
B:Agency theory considers all stakeholders; stakeholder theory focuses only on shareholders
C:Agency theory advocates for managerial ownership; stakeholder theory advocates for separation of ownership and control
D:Agency theory views directors as owners; stakeholder theory views directors as agents
2

Which approach to corporate governance requires boards to consider stakeholder interests only insofar as it benefits shareholders?

A:Enlightened shareholder value approach
B:Inclusive stakeholder approach
C:Stakeholder approach
D:Shareholder value approach
3

What differentiates a rules-based approach from a principles-based approach to corporate governance?

A:A rules-based approach imposes mandatory regulations; a principles-based approach relies on voluntary guidelines
B:A rules-based approach is only for private companies; a principles-based approach is for listed companies
C:A rules-based approach focuses on ethics; a principles-based approach focuses on laws
D:A rules-based approach allows flexibility; a principles-based approach is rigid
4

Why is understanding an organisation's purpose key in implementing an effective corporate governance framework?

A:Because all governance structures, strategies and risk management stem from the organisation’s purpose
B:Because it dictates the exact policies the organisation must follow
C:Because shareholders define the purpose which governs the framework
D:Because the purpose determines the size of the board
5

According to the UK Corporate Governance Code 2018, what is the minimum number of independent non-executive directors a board should have for listed companies?

A:At least half the board, excluding the chair
B:At least one-third of the board
C:All non-executive directors must be independent
D:At least two independent non-executive directors
6

Which of the following is NOT a principal responsibility of the audit committee under the UK Corporate Governance Code?

A:Reviewing the integrity of financial statements
B:Reviewing risk management and internal controls
C:Deciding the company's strategic objectives
D:Monitoring effectiveness of internal and external auditors
7

What is the main purpose of the Directors’ Remuneration Policy that must be approved by shareholders in UK listed companies?

A:To set clear guidelines on executive pay to align remuneration with company strategy and long-term success
B:To detail the salary of every employee in the company
C:To specify the maximum dividends paid to shareholders
D:To regulate the non-executive directors’ attendance fees
8

Why should remuneration committees include malus and clawback provisions in executive pay schemes?

A:To allow forfeiture or recovery of bonuses or awards if performance targets are misstated or misconduct occurs
B:To increase executive pay during economic crises
C:To guarantee payments regardless of company performance
D:To limit pensions contributions for executives
9

What is the key distinction between triple bottom line reporting and integrated reporting?

A:Triple bottom line reports focus on environmental, social and economic impacts; integrated reports combine these with financial reporting for investors
B:Triple bottom line reports are mandatory; integrated reports are voluntary
C:Triple bottom line reports only focus on financial performance; integrated reports include social impacts
D:Integrated reporting is only for private companies; triple bottom line is for listed companies
10

According to the UK Stewardship Code 2020, what is expected of asset owners and asset managers regarding stewardship?

A:Take responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries
B:Focus exclusively on short-term returns to maximize profit
C:Delegate all stewardship activities to service providers
D:Avoid engagement with investee companies
Sign up to access all questions

Related Exams

IB
20 min

IB Practice Test - 11/21/2025

Practice test for IB

10 Questions