NACD CERT STUDY QUESTIONS
ACTUAL UPDATED QUESTIONS AND
CORRECT 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? - CORRECT ANSWERS✅✅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? - CORRECT ANSWERS✅✅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?
- CORRECT ANSWERS✅✅Financial institutions, under the Dodd-Frank Act
Which of the following is not a federal statute that influenced the corporate governance
structure used today? - CORRECT ANSWERS✅✅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? - CORRECT
ANSWERS✅✅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. - CORRECT ANSWERS✅✅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? -
CORRECT ANSWERS✅✅Finance
, Which of the following statements does not appropriately characterize the role of board
committees? - CORRECT ANSWERS✅✅The role of committees as "subject-matter
experts" should be taken casually
Which of the following best illustrates an example of healthy board culture? - CORRECT
ANSWERS✅✅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 - CORRECT ANSWERS✅✅Providing only last-minute notification of meetings
Inherent, asymmetric-information risk" refers to: - CORRECT ANSWERS✅✅The usual
reality that managers know more about a company's operations than the board
Understanding Committee Structures - CORRECT ANSWERS✅✅· 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? - CORRECT ANSWERS✅✅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? - CORRECT ANSWERS✅✅Ensures that the company complies with all
applicable law and regulations: Caremark
ACTUAL UPDATED QUESTIONS AND
CORRECT 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? - CORRECT ANSWERS✅✅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? - CORRECT ANSWERS✅✅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?
- CORRECT ANSWERS✅✅Financial institutions, under the Dodd-Frank Act
Which of the following is not a federal statute that influenced the corporate governance
structure used today? - CORRECT ANSWERS✅✅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? - CORRECT
ANSWERS✅✅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. - CORRECT ANSWERS✅✅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? -
CORRECT ANSWERS✅✅Finance
, Which of the following statements does not appropriately characterize the role of board
committees? - CORRECT ANSWERS✅✅The role of committees as "subject-matter
experts" should be taken casually
Which of the following best illustrates an example of healthy board culture? - CORRECT
ANSWERS✅✅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 - CORRECT ANSWERS✅✅Providing only last-minute notification of meetings
Inherent, asymmetric-information risk" refers to: - CORRECT ANSWERS✅✅The usual
reality that managers know more about a company's operations than the board
Understanding Committee Structures - CORRECT ANSWERS✅✅· 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? - CORRECT ANSWERS✅✅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? - CORRECT ANSWERS✅✅Ensures that the company complies with all
applicable law and regulations: Caremark
