NACD CERT STUDY Guide Exam
QUESTIONS And Actual Answers.
Which of the following statements is inaccurate about why directors should continuously educate
themselves on emerging trends affecting their business, their industry, and other industries? - Answer
Directors who make a commitment to stay current on key environmental trends will be unable to guide
the organization that they serve when those trends don't directly impact their organization.
Which of the following statements best describes a recommended structure and composition of a
private, family-owned-company board? - Answer Private, family-owned-company boards ideally include
directors who can be independent and objective parties outside the family business in order to prevent
conflicts of interest.
Today, risk committees are required at what type of institutions and under which federal law? - Answer
Financial institutions, under the Dodd-Frank Act
Which of the following is not a federal statute that influenced the corporate governance structure used
today? - Answer Delaware General Corporation Law
Which of the following is not an accurate subset of NACD's 10 Key Agreed Principles and Common Sense
Principles about corporate governance? - Answer Commitment to Cybersecurity; Shareholder
Detachment from Director Selection; Information, Agenda & Strategy
Among the roles shown below, select the roles that are consistent with being a director, not with being a
manager or executive. - Answer Ensure good management, In the absence of a CMO at a small-cap
company, advise the CEO about marketing, Company governance, Fill CFO duties temporarily, due to a
crisis
Which of the following is not one of the three traditional (or standing) committees? - Answer Finance
Which of the following statements does not appropriately characterize the role of board committees? -
Answer The role of committees as "subject-matter experts" should be taken casually
, Which of the following best illustrates an example of healthy board culture? - Answer All directors are
engaged in board-level conversations.
Which of the following is not an example of the nuts and bolts of effective board meeting preparation -
Answer Providing only last-minute notification of meetings
Inherent, asymmetric-information risk" refers to: - Answer The usual reality that managers know more
about a company's operations than the board
Understanding Committee Structures - Answer · Overseeing accounting and tax operations is the
responsibility of the audit committee.
· Overseeing the CEO succession planning process is traditionally the responsibility of the nominating
and governance committee.
· Advising the board on market salaries for C-suite executives is the responsibility of the compensation
committee.
· Overseeing the CFO's responsibilities is the responsibility of the audit committee.
· Overseeing internal and external audit functions is the responsibility of the audit committee.
· Overseeing talent management is the responsibility of the nominating and governance committee.
· The nominating and governance committee is responsible for the succession process for directors.
· The audit is most likely to oversee risk management in the absence of a risk committee.
Which of the following is not an example of a key shift in US corporate governance that occurred
between the early 1900s and today? - Answer Shift from monitoring boards to captured boards
Which of the following best describes the oversight duty and the case often used to illustrate this
responsibility? - Answer Ensures that the company complies with all applicable law and regulations:
Caremark
Under the business judgement rule, which of the following does not characterize how directors should
act? - Answer Making hasty decisions in an uninformed manner
Which of the following most accurately reflects the key shift in corporate governance that began in the
1990s? - Answer A shift from the "captured board" to the "monitoring board"
QUESTIONS And Actual Answers.
Which of the following statements is inaccurate about why directors should continuously educate
themselves on emerging trends affecting their business, their industry, and other industries? - Answer
Directors who make a commitment to stay current on key environmental trends will be unable to guide
the organization that they serve when those trends don't directly impact their organization.
Which of the following statements best describes a recommended structure and composition of a
private, family-owned-company board? - Answer Private, family-owned-company boards ideally include
directors who can be independent and objective parties outside the family business in order to prevent
conflicts of interest.
Today, risk committees are required at what type of institutions and under which federal law? - Answer
Financial institutions, under the Dodd-Frank Act
Which of the following is not a federal statute that influenced the corporate governance structure used
today? - Answer Delaware General Corporation Law
Which of the following is not an accurate subset of NACD's 10 Key Agreed Principles and Common Sense
Principles about corporate governance? - Answer Commitment to Cybersecurity; Shareholder
Detachment from Director Selection; Information, Agenda & Strategy
Among the roles shown below, select the roles that are consistent with being a director, not with being a
manager or executive. - Answer Ensure good management, In the absence of a CMO at a small-cap
company, advise the CEO about marketing, Company governance, Fill CFO duties temporarily, due to a
crisis
Which of the following is not one of the three traditional (or standing) committees? - Answer Finance
Which of the following statements does not appropriately characterize the role of board committees? -
Answer The role of committees as "subject-matter experts" should be taken casually
, Which of the following best illustrates an example of healthy board culture? - Answer All directors are
engaged in board-level conversations.
Which of the following is not an example of the nuts and bolts of effective board meeting preparation -
Answer Providing only last-minute notification of meetings
Inherent, asymmetric-information risk" refers to: - Answer The usual reality that managers know more
about a company's operations than the board
Understanding Committee Structures - Answer · Overseeing accounting and tax operations is the
responsibility of the audit committee.
· Overseeing the CEO succession planning process is traditionally the responsibility of the nominating
and governance committee.
· Advising the board on market salaries for C-suite executives is the responsibility of the compensation
committee.
· Overseeing the CFO's responsibilities is the responsibility of the audit committee.
· Overseeing internal and external audit functions is the responsibility of the audit committee.
· Overseeing talent management is the responsibility of the nominating and governance committee.
· The nominating and governance committee is responsible for the succession process for directors.
· The audit is most likely to oversee risk management in the absence of a risk committee.
Which of the following is not an example of a key shift in US corporate governance that occurred
between the early 1900s and today? - Answer Shift from monitoring boards to captured boards
Which of the following best describes the oversight duty and the case often used to illustrate this
responsibility? - Answer Ensures that the company complies with all applicable law and regulations:
Caremark
Under the business judgement rule, which of the following does not characterize how directors should
act? - Answer Making hasty decisions in an uninformed manner
Which of the following most accurately reflects the key shift in corporate governance that began in the
1990s? - Answer A shift from the "captured board" to the "monitoring board"
