CERTIFIED CORPORATE GOVERNANCE
PROFESSIONAL EXAM QUESTION AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2026 Q&A
INSTANT DOWNLOAD PDF
1. What is the primary purpose of corporate governance?
A. To increase company sales
B. To protect stakeholders’ interests
C. To manage daily operations
D. To reduce taxes
Rationale: Corporate governance ensures accountability, fairness, and
transparency to protect stakeholders.
2. Which body typically has the highest authority in corporate governance?
A. Internal audit
B. Management
C. Board of Directors
D. Shareholders
Rationale: The Board of Directors sets governance policies and oversees
management.
3. What does “fiduciary duty” refer to?
A. Legal compliance
B. Duty to act in best interest of the company
C. Marketing responsibility
D. Operational task
Rationale: Directors have a fiduciary duty to act loyally and responsibly.
,4. Which principle emphasizes fairness to all shareholders?
A. Efficiency
B. Innovation
C. Equity
D. Profitability
Rationale: Equity ensures equal treatment of all shareholders.
5. What role does risk management play in corporate governance?
A. Human resource planning
B. Sales strategy
C. Product development
D. Identifying and mitigating risks
Rationale: Risk management helps boards anticipate and manage threats
to the organization.
6. Which committee often oversees financial reporting processes?
A. Remuneration Committee
B. Audit Committee
C. Strategy Committee
D. Marketing Committee
Rationale: The Audit Committee oversees financial integrity and reporting.
7. What is board independence?
A. Board controls management
B. Directors without material ties to company
C. Board manages daily tasks
D. Management reports to shareholders
Rationale: Independent directors enhance objectivity and reduce conflicts
of interest.
8. Which law often governs corporate conduct in many jurisdictions?
A. Tax law
B. Labour law
C. Company law
, D. Environmental law
Rationale: Company law establishes governance frameworks and duties.
9. What is a conflict of interest?
A. Lack of skills
B. When personal interests clash with company duties
C. Competitive pricing strategy
D. Miscommunication
Rationale: Conflicts arise when personal interests interfere with fiduciary
duty.
10.What is transparency in corporate governance?
A. Hiring practice
B. Profit sharing
C. Open communication of information
D. Internal promotions
Rationale: Transparency builds trust through clear disclosure.
11.Who appoints the external auditors?
A. CEO
B. CFO
C. Shareholders/Board
D. Employees
Rationale: External auditors are appointed by shareholders or the board
to ensure unbiased review.
12.What is “shareholder activism”?
A. Hiring new managers
B. Shareholders engaging in governance issues
C. Dividends payment process
D. Board elections
Rationale: Activism involves shareholders pushing for change.
13.What is corporate social responsibility (CSR)?
A. Legal penalty
PROFESSIONAL EXAM QUESTION AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2026 Q&A
INSTANT DOWNLOAD PDF
1. What is the primary purpose of corporate governance?
A. To increase company sales
B. To protect stakeholders’ interests
C. To manage daily operations
D. To reduce taxes
Rationale: Corporate governance ensures accountability, fairness, and
transparency to protect stakeholders.
2. Which body typically has the highest authority in corporate governance?
A. Internal audit
B. Management
C. Board of Directors
D. Shareholders
Rationale: The Board of Directors sets governance policies and oversees
management.
3. What does “fiduciary duty” refer to?
A. Legal compliance
B. Duty to act in best interest of the company
C. Marketing responsibility
D. Operational task
Rationale: Directors have a fiduciary duty to act loyally and responsibly.
,4. Which principle emphasizes fairness to all shareholders?
A. Efficiency
B. Innovation
C. Equity
D. Profitability
Rationale: Equity ensures equal treatment of all shareholders.
5. What role does risk management play in corporate governance?
A. Human resource planning
B. Sales strategy
C. Product development
D. Identifying and mitigating risks
Rationale: Risk management helps boards anticipate and manage threats
to the organization.
6. Which committee often oversees financial reporting processes?
A. Remuneration Committee
B. Audit Committee
C. Strategy Committee
D. Marketing Committee
Rationale: The Audit Committee oversees financial integrity and reporting.
7. What is board independence?
A. Board controls management
B. Directors without material ties to company
C. Board manages daily tasks
D. Management reports to shareholders
Rationale: Independent directors enhance objectivity and reduce conflicts
of interest.
8. Which law often governs corporate conduct in many jurisdictions?
A. Tax law
B. Labour law
C. Company law
, D. Environmental law
Rationale: Company law establishes governance frameworks and duties.
9. What is a conflict of interest?
A. Lack of skills
B. When personal interests clash with company duties
C. Competitive pricing strategy
D. Miscommunication
Rationale: Conflicts arise when personal interests interfere with fiduciary
duty.
10.What is transparency in corporate governance?
A. Hiring practice
B. Profit sharing
C. Open communication of information
D. Internal promotions
Rationale: Transparency builds trust through clear disclosure.
11.Who appoints the external auditors?
A. CEO
B. CFO
C. Shareholders/Board
D. Employees
Rationale: External auditors are appointed by shareholders or the board
to ensure unbiased review.
12.What is “shareholder activism”?
A. Hiring new managers
B. Shareholders engaging in governance issues
C. Dividends payment process
D. Board elections
Rationale: Activism involves shareholders pushing for change.
13.What is corporate social responsibility (CSR)?
A. Legal penalty
