CSCS - HS&E for managers and operatives exam with complete solution and correct answers.

CSCS - HS&E for managers and operatives exam with complete solution and correct answers. what does the nominations committee do on the board of directors? - -handles recruiting of new (independent) board members (this will effect whether or not the board works for the benefit of shareholders) what is a classified board when taking about the board of directors? - -acts as a takeover defense, a structure for a board of directors in which a portion of the directors serve for different term lengths, depending on their particular classification what makes a board independent? - -if their decisions are not controlled or biased by management of the firm in order to remain unbiased, the board of directors must not have any relationship with what entities? - -1. the firm and its subsidiaries, including former employees, executives, and their families 2. individuals or groups, such as a shareholder with a controlling interest, which can influence the firm's management 3. executive management and their families 4. the firm's advisors, auditors, and their families 5. any entity which has a cross directorship with the firm why is it a problem is board members don't have the requisite skills and experience? - -they will likely defer to management to make decisions, which is bad for shareholders when evaluating the qualifications of board members, you must consider what about board members? - -1. can make informed decisions about the firm's future 2. can act with care and competence as a result of their experience with the technology, products, and services that the firm offers, accounting topics, legal issues, strategies and planning, and business risk the firm faces 3. have they made any public statements indicating their ethical stances 4. have had legal or regulatory problems as a result of working for or serving on the firm's board or the board of another firm 5. have other board experience 6. regularly attend meetings 7. are committed to shareholders (do they have significant stock positions?) 8. has the individual served on the board for over 10 years? might be too aligned with management what are the main functions of the audit committee? - -1. proper accounting and auditing procedures have been followed 2. the external auditor is free from management influence 3. any conflicts between the external auditor and the firm are resolved in a manner that favors the shareholder 4. independent auditors have authority over the audit of all the company's affiliates and divisions 5. committee members are financial experts 6. shareholders vote on the approval of the board's selection of the external auditor 7. the audit committee has authority to approve or reject any proposed non-audit 8. the firm has provisions and procedures that specify to whom the internal auditor reports what is corporate governance in a general definition? - -the set of controls, processes, and procedures by which firms are managed (defines the appropriate rights, roles, and responsibilities of management, board of directors, and shareholders) what does good corporate governance ensure? - -1. the board of directors protects shareholder interests 2. the firm acts lawfully and ethically in dealings with shareholders 3. the rights of shareholders are protected and shareholders have a voice in governance 4. the board acts independently from management 5. proper procedures and controls cover management's day-to-day operations 6. the firm's financial, operating, and governance activities are reported to shareholders in a fair, accurate, and timely manner while reviewing firm policy regarding election of the board, investors should consider what factors? - -1. whether there are annual elections or staggered multiple-year terms (a classified board) 2. whether the board filled a vacant position for a remaining term without shareholder approval 3. whether shareholders can remove a board member 4. whether the board is the proper size for the specific facts and circumstances of the firm what does the renumeration/compensation committee do on the board of directors? - -sets executive compensation, commensurate with responsibilities and performance what