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CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

1. You are at a conference. The finance director of one of your competitors is boasting about top secret plans that she says will give her company market dominance. As she walks into a conference session, she accidently drops a folder marked "private and confidential". No one else notices and you are left alone in the room with the folder. Which of the following would be an ethical course of action and why?

A) Give the folder to a journalist friend at the conference because it is in the public interest to expose the company's plans
B) Read the contents in the hope that you can help your company by preventing your competitor's plans
C) Return the folder to your competitor unopened because this is what you would hope would be done if you were in her situation
D) Read the contents in order to teach the arrogant finance director a lesson

2. Which of the following statements is correct?
(i) The Articles of Association of a private company limited by shares may be altered by special resolution.
(ii) The Articles of Association of a private company limited by shares may be altered by a written resolution.
(iii) The Articles of Association of a private company limited by shares may be altered by an ordinary resolution.

A) (ii) only
B) (i) and (ii) only
C) (ii) and (iii) only
D) (i) only

3. Which of the following is INCORRECT in relation to the recommendations of the Greenbury Committee Report of 1995?

A) Any long-term incentive schemes to be offered to directors should first be approved by the shareholders.
B) Annual bonuses should not be pensionable.
C) Directors should never be given discounted share options.
D) All the recommendations were incorporated into the Stock Exchange Listing Rules.

4. Which of the following terms can be defined as follows?
"How an organization manages its relationships in the wider community"

A) Social responsibility
B) Ethics
C) Corporate governance
D) Professional behavior

5. Which one of the following reasons is not automatically an unfair reason for dismissal?

A) An employee's gross misconduct.
B) Lack of qualification.
C) Contravention of a statute.
D) An employee's pregnancy.

Solutions: