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CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

1. Which of the following is incorrect?

A) The first directors of the company are those persons who are named as directors on Form IN01.
B) The board usually has the power to appoint a managing director.
C) A private company must have at least two directors.
D) A board usually reaches its decisions by majority vote.

2. Which of the following is INCORRECT in relation to an alteration of a company's articles of association?

A) As long as the resolution to alter the articles is approved by 75% of the members of the company, it may require members to purchase additional shares.
B) Any special resolution to alter a company's articles of association may be passed by the members in a general meeting or by a written resolution.
C) The articles may be amended by the members passing a special resolution.
D) Any special resolution to alter the articles must be passed in good faith in the best interest of all the shareholders.

3. Which of the following statements is incorrect in relation to a public company limited by shares?

A) The company must have at least one shareholder.
B) The company must have issued at least £50,000 of shares.
C) The company must have at least one director.
D) The company must ensure that its company secretary is properly qualified whereas a private company need not have a company secretary.

4. How many fundamental principles are identified by the CIMA Code of Ethics?

A) Four
B) Six
C) Five
D) Three

5. Which of the following are included in CIMA's practical proposals for better reporting of corporate governance?
1. The Chief Executive should communicate information regarding the performance of individual directors to the shareholders
2. The company should explain how the information needs of the shareholders have been met during the year
3. The Chairman's views on good governance and the culture of the board should be communicated

A) 1 and 2 only
B) 2 and 3 only
C) 1 only
D) 1,2 and 3

Solutions: