CIPS Module 1 - Explain Key Aspects of
Corporate Governance of a Procurement or
Supply Chain Function - 3.1 UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Define the terms
Corporate Governance
Stakeholders
Cod of ethics - CORRECT ANSWER - The mechanisms, procedures and processes that
are used to control and direct an organisation
An individual or group of individuals with an interest in an organisation, employees, customers,
community
A document detailing acceptable behaviour within an organisation
Describe what is meant by corporate governance? - CORRECT ANSWER - The system of
standards, procedures, and policies by which can organisation is controlled. It is a framework
that is created around the organisations values and objectives
Focuses on making organisations, effective, efficient and successful and their procedures and
policies ethical
Aims to govern and control the actions of stakeholders. The policies contain the roles and
expectations of people within their organisation
Ensure individuals don't take advantage of the organisation to gain an unfair advantage
, State the elements of corporate governance? - CORRECT ANSWER - Policies and
Procedures
Stakeholder Management and Board Accountability
Performance Management
Stakeholder Protection
Values and Ethics
Describe what is meant by conflicts of interests? - CORRECT ANSWER - This occurs
when a persons involvement within an organisation includes multiple interests
Interests could be financial or having a family member working within the business, these may
influence a persons behaviours in favour of their own gain (apposing loyalties)
State examples of conflicts of interest and the possible outcomes of this? - CORRECT
ANSWER - A buyer having a close relationship with a procurement manager - the buyer
may be treated more favourably than others and rules not followed, salary could be higher than
others due to personal relationships
A buyer having a relationship with a subordinate or supplier - confidential information could be
disclosed, unprofessional conversations could be held in the work place. Subordinate could
receive favourable treatment
A buyer awarding a contract to a family member - buyer may help the family member to win the
contract by sharing information to benefit them unfairly, family could financially compensate
Creating a rival organisation to the one which a person is employed by - if a buyer sets up a
business that is identical to that of their employer, employing business could lose business
Accepting payment from suppliers in exchange for information - a buyer could be influenced to
award a contract to an unsuitable supplier or unfairly award a contract to a supplier who does not
provide the best value
Corporate Governance of a Procurement or
Supply Chain Function - 3.1 UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Define the terms
Corporate Governance
Stakeholders
Cod of ethics - CORRECT ANSWER - The mechanisms, procedures and processes that
are used to control and direct an organisation
An individual or group of individuals with an interest in an organisation, employees, customers,
community
A document detailing acceptable behaviour within an organisation
Describe what is meant by corporate governance? - CORRECT ANSWER - The system of
standards, procedures, and policies by which can organisation is controlled. It is a framework
that is created around the organisations values and objectives
Focuses on making organisations, effective, efficient and successful and their procedures and
policies ethical
Aims to govern and control the actions of stakeholders. The policies contain the roles and
expectations of people within their organisation
Ensure individuals don't take advantage of the organisation to gain an unfair advantage
, State the elements of corporate governance? - CORRECT ANSWER - Policies and
Procedures
Stakeholder Management and Board Accountability
Performance Management
Stakeholder Protection
Values and Ethics
Describe what is meant by conflicts of interests? - CORRECT ANSWER - This occurs
when a persons involvement within an organisation includes multiple interests
Interests could be financial or having a family member working within the business, these may
influence a persons behaviours in favour of their own gain (apposing loyalties)
State examples of conflicts of interest and the possible outcomes of this? - CORRECT
ANSWER - A buyer having a close relationship with a procurement manager - the buyer
may be treated more favourably than others and rules not followed, salary could be higher than
others due to personal relationships
A buyer having a relationship with a subordinate or supplier - confidential information could be
disclosed, unprofessional conversations could be held in the work place. Subordinate could
receive favourable treatment
A buyer awarding a contract to a family member - buyer may help the family member to win the
contract by sharing information to benefit them unfairly, family could financially compensate
Creating a rival organisation to the one which a person is employed by - if a buyer sets up a
business that is identical to that of their employer, employing business could lose business
Accepting payment from suppliers in exchange for information - a buyer could be influenced to
award a contract to an unsuitable supplier or unfairly award a contract to a supplier who does not
provide the best value
