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CIMA BA4 Actual Questions

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Total 661 questions

Fundamentals of Ethics - Corporate Governance and Business Law Questions and Answers

Question 93

You work for a company that is constructing a major football stadium. The day that the stadium is finished, large cracks appear in the supporting walls. It turns out that your company's purchasing director bought cement from a new and inexperienced company. You find out that the cement supplier was no cheaper than the other suppliers who had bid for the contract but that the son of your purchasing director happens to run the cement company. Is this an ethical issue and why?

Options:

A.

Yes - the cement supplier clearly knew that it was providing faulty materials

B.

Yes - your purchasing director has had a conflict of interest in this matter

C.

No - there is no evidence to show that the company knew that the cement was faulty

D.

No - the cement supplier was clearly chosen on the basis of value for money rather than personal connections

Question 94

Miss B is working closely with Mr L to deliver an important report on the efficiency of Mr L's department.  They have had to work late together several times, and last night they went out to dinner afterwards.  Miss B is starting to think she may have feelings for Mr L. Could her independence be called into question?

Options:

A.

Yes, her feelings could be influencing her independence of mind

B.

No, she is not actually dating Mr L so her independence of appearance is not compromised

C.

No, provided she does not act on her feelings and continues to be professional

D.

Yes, having dinner with a work colleague can affect her independence of appearance

Question 95

'Remuneration' is one of the main principles in the Corporate Governance Code. Which of the following is NOT best practice under the 'Remuneration' principle?

Options:

A.

Remuneration should be sufficient to attract, retain and motivate directors of the quality required to run the company successfully, but should not be excessive

B.

Remuneration should be structured in order to link a significant proportion of the rewards to corporate and individual performance

C.

There should be a formal and transparent procedure for developing policy on executive remuneration

D.

The board of directors are able to set the remuneration of non-executive directors

Question 96

DGH is a company operating in the oil and gas industry, which is heavily regulated. The government is considering introducing a new law which is likely to result in a dramatic cut in profitability for DGH.

Which of the following is NOT a legitimate method for DGH to influence government policy in its own best interests?

Options:

A.

Employing lobbyists to put DGH's case to ministers or civil servants.

B.

Offering financial incentives to public officials to use their influence on DGH's behalf

C.

Attempting to influence public opinion in order to put pressure on the legislative agenda

D.

Inviting government ministers to attend the next board meeting of DGH to allow the directors to put forward their view

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Total 661 questions