IMTC635 - Ethics & Corporate Governance

1. NTPC 's sustainable development plan includes:

· Plantation of trees, Biodiversity, Improving health and well-being

· Waste management, Water management, Biodiversity, and Promotion of renewable energy
· Plantation of tress, Rainwater harvesting, Improving health and Reducing environmental
impact
· Improving health, Water management, and Reducing environmental impact

2. Which one of the following one should understand be the description Environmental Ethics?

· Global awareness about surrounding environment.

· Good behaviour of mankind towards environment.
· Study of environment by environmentalists.
· An act by environmentalists.

3. According to ..... of the SEBI Act, SEBI has the responsibility to protect the interests of investors
in securities and to promote the development of and to regulate the securities markets by way of
taking appropriate measures

· Section 1(11)
· Section 1(1)
· Section 11(1)
· Section 11(11)

4. The principal activities in the process of corporate governance are:

· Direction, executive action, supervision and accountability

· Direction, supervision and accountability
· Executive action and direction
· Direction and accountability

5. Which of the following might pose severe challenges for a business corporate in remaining truly
ethical?

· Workforce limitations.
· Honest submission of minor deviations.
· Technology limitation.
· Managerial limitations.

6. Which of the following statements are true as per Thomas Hobbes Social Contract Theory?

· A contract between an institution and economically weaker sections of society including the
rural population highlighting provision of best medical and engineering education at
affordable costs.
· A contract of agreement between people and the society and between different people in a
society for mutual benefits.
· If the overall benefits or net benefits of a product are considered more valuable and more
useful by a large section of the population, it should then be treated as an ethical product
generated through ethical means.
 · Human nature and actions are bound by certain personal and social moral codes of discipline
embracing dos and don'ts to ensure social harmony, congeniality and comfort for all in a
society.

7. The basic responsibilities of the directors in companies are

· The fiduciary duty of loyalty and good faith and obligation to honesty and integrity.
· Responsibilities to the shareholders and obligation to honesty and integrity.
· The fiduciary duty of loyalty and good faith and the duties of care and skill.
· Towards the shareholders and the duties of care and skill.

8. There are plenty of benefits of inclusion of independent director in a family board. Find the odd
statement.

· An outside/independent director can support the necessary reorganization and help to

moderate its impact on family members.
· He can refrain himself from getting involved either in family problems or in day-to-day
company affairs.
· He can counsel against nepotism on the issue of succession.
· He can help to sort out the governance processes for the benefit of family directors.

9. The principal issues involved in respect of board composition are:

· The age of the board members

· All the above
· Proportion of inside vs. outside directors
· Size, structure and style of the board

10. Which of the following do not contribute to building a good professional ethics base for a
business corporate?

· Correctly understanding customer application and its limitations to appropriately design the
satisfactory process sequence and activity details to generate the right type of output by
right means.
· Identifying the nearest supply source to ensure procurement economy.
· Identifying fair means and methods to generate corporate wealth.
· (ii) and (iii)

11. An independent director who resigns or is removed from the board of the company shall be
replaced by a new independent director within a period of

· Not less than 280 days from the date of such resignation or removal
· More than 280 days from the date of such resignation or removal
· Within 180 days from the date of such resignation or removal
· Less than 18 days from the date of such resignation or removal

12. Clause 49 II A of the SEBI Listing Agreement is replaced by

· Companies Act 2014 (Listing Regulations)

· SEBI Regulations 2015 (Listing Regulations)
· RBI Regulations
· SEBI Regulations 2013 (Listing Regulations)
13. Intellectual properties:

· Always carry a price comparison and a competition tag.

· Are ready to use knowledge packages.
· None of these
· Can be readily purchased.

14. Naresh Chandra Committee (2002) stipulates that an independent director of a company is a non-
executive director who

· Has not been a director, independent or otherwise, of the company for more than 3 (three)
terms of 3 (three) years each [not exceeding 9 (nine) years in any case.
· Is not related to promoters or management at the board level or at one level below the board.
· Has not been an executive of the company in the immediately preceding 3 (three) financial
years.
· Is not a partner or an executive of the statutory audit firm or the internal audit firm that is
associated with the company, and has not been a partner or an executive of any such firm for
the last 3 (three) years.

15. Every listed public company shall have at least ..... of the total number of directors as
independent directors

· Half
· One-third
· Two-third
· One-fourth

16. What is Business Ethics?

· Nobility of operation philosophy that is upheld by actual practices of a business enterprise.

· Good behaviour of business managers.
· An abstract description used by the society.
· Summary of ethics practiced by different constituent professions.

17. K.M. Birla Committee was set up by

· SEBI
· RBI
· CII
· MCA

18. A formally declared and documented ethical commitment of the organisation is called:

· A compliance
· EtMS
· A credo
· A checklist

19. Who is interested in intellectual property?

· Non-profit making organisations

· Business organisations dealing in commodity products and services
· Common people
 · Business organisations dealing in financial derivatives

20. Which of the following elements is a good ethics audit deliverable?

· Policy limitation
· EEI/MCI
· ODHRTP
· EtMS

21. Which of the following element plays a key role in ensuring compliance to ethical requirements?

· Environmental aspects identification

· Ethical performance environment
· Creation of a sincere and dedicated workforce
· Legal aspects identification

22. According to which Section of the companies Act 2013, companies and independent directors
shall abide by the provisions specified in the Schedule IV, which prescribes the guidelines of
professional conduct, roles and functions and duties of the independent directors.

· Section 152 (0)

· Section 149(8)
· Section 149(0)
· Clause 165 (1)

23. The concept of corporate sustainability is derived from the elements of

· All the above

· Corporate social responsibility
· Stakeholder and corporate accountability theories
· Sustainable development

24. Selection of Ethics auditor should be based on their:

· Knowledge of EtMS
· Audit expertise
· Knowledge of SOX Act
· Knowledge of audit standards

25. As per Section 135 of the Companies Act, 2013 and Company Rules, 2014 required that every
company having a net worth of 500 crore or more, or turnover of 1000 crore or more or a net profit of
5 crore or more during any financial year shall ensure that the company spends, in every financial
year, in pursuance of its Corporate Social Responsibility (CSR) Policy:

· At least 5% of the average net profits made during the three immediately preceding financial
years
· At least 2% of the average net profits made during the three immediately preceding financial
years.
· At least 2% of the average net profits made during the two immediately preceding financial
years
 · At least 5% of the average net profits made during the two immediately preceding financial
years

26. Which of the following statements are supported by Carol Gilligan 's Theory of moral
development?

· An action path should be designed in such a way that there would be no adverse
consequence on anybody and should befree from harming someone or causing problem to
others.
· Moral concepts should not be confined to blind abidance to abstract rights and rules but
should be based on a better affinity towards ways of living namely the finer elements of
values of life that can keep people happy.
· Moral thoughts should be more contextualized to the realities of life with due emphasis on
identifying solutions to situations even if they are dilemmatic in nature.
· Development of human psychology and moral thoughts would generally be centered on
rules, regulations and abstract principles.

27. Ethics is also known as code of

· Practices
· Conduct
· Professionals
· Wisdom

28. A corporate is required to publish exhibiting its sustainability plan and development in:

· Both of the above

· Business Responsibility (BR) Report
· Corporate Social Responsibility (CSR) Report
· None of the above

29. The age limit and tenure of directors in PSUs and PSBs are governed by the:

· Corporate Affairs
· Labour, Employment and Training
· Department of Public Enterprises
· Human Resources Development

30. Which of the following statements is correct?

· Ina unitary board system, the activities and processes of governance and management are
overlapping.
· Ina two-tier board system, the activities and processes of governance and management are
overlapping.
· Ina unitary board system, the activities and processes of governance and management are
compartmentalized.
· Ina two-tier board system, the activities and processes of governance and management are
semi-dependent.
Assignment-1

1. There are plenty of benefits of inclusion of independent director in a family board. Find the odd statement.
· An outside/independent director can support the necessary reorganization and help to moderate its
impact on family members.
· He can refrain himself from getting involved either in family problems or in day-to-day company
affairs.
· He can counsel against nepotism on the issue of succession.
· He can help to sort out the governance processes for the benefit of family directors.

2. Which one of the following one should understand be the description Environmental Ethics?

· Global awareness about surrounding environment.

· Good behaviour of mankind towards environment.
· Study of environment by environmentalists.
· An act by environmentalists.

3. The basic responsibilities of the directors in companies are

• The fiduciary duty of loyalty and good faith and obligation to honesty and integrity.
• Responsibilities to the shareholders and obligation to honesty and integrity.
• The fiduciary duty of loyalty and good faith and the duties of care and skill.
• Towards the shareholders and the duties of care and skill.

4. Code of corporate governance framed by

a) SEBI
b) CII
c) RBI
d) None of these
5. London stock exchange recommended that
a) the board should include a balance of Executive directors and non-executive directors including
independent directors
b) Each company should establish an audit committee
c) The board should include non-executive directors of sufficient calibre
d) The majority of the board members must be independent

6. In case of the appointment of a new director or reappointment of a director, the shareholders must be
provided with information
a) A brief resume of the director.
b) Nature of his expertise in specific functional areas.
c) Names of companies in which the person also holds the directorship and the membership of
committees of the board.
d) All of these.
7. Patent rights are granted only for
a) 50 years
b) 10 years
c) 60 years
d) 20 years
8. According to ..... of the SEBI Act, SEBI has the responsibility to protect the interests of investors in
securities and to promote the development of and to regulate the securities markets by way of taking
appropriate measures

a) Section 1(11)
b) Section 1(1)
c) Section 11(1)
d) Section 11(11)

9. Which of the following elements is a good ethics audit deliverable?

a) Policy limitation
b) EEI/MCI
c) DHRTP
d) EtMS

10. According to which Section of the companies Act 2013, companies and independent directors shall
abide by the provisions specified in the Schedule IV, which prescribes the guidelines of professional
conduct, roles and functions and duties of the independent directors.
a) Section 152 (0)
b) Section 149(8)
c) Section 149(0)
d) Clause 165 (1)

11. any investment made by the society for the development and maintenance of all kinds of infrastructure
for people's benefit is called
a) natural common sense law.
b) Code of Conduct
c) People’s law
d) Law of professionals
12. Clause 49 II A of the SEBI Listing Agreement is replaced by

a) Companies Act 2014 (Listing Regulations)

b) SEBI Regulations 2015 (Listing Regulations)
c) RBI Regulations
d) SEBI Regulations 2013 (Listing Regulations)

13. Which of the following statement is correct

a.ina unitary board system, the activities and processes of governance and management are overlapping

14. Why is it implemented to protect intellectual property

c. To safeguard it from infringement
15. What is Business Ethics?

· Nobility of operation philosophy that is upheld by actual practices of a business enterprise.

· Good behaviour of business managers.
· An abstract description used by the society.
· Summary of ethics practiced by different constituent professions.