Unit 5: Corporate Ethics and Governance - Practice Quiz

1 What is a law?

2 What do ethics primarily help people decide?

3 Which statement best describes the relationship between law and ethics?

4 What is usually the minimum standard required by law?

5 What are organizational values?

6 Which value emphasizes being truthful and honest?

7 What is an ethical code of conduct?

8 What should an employee do when facing an ethical concern at work?

9 What is corporate governance?

10 Who generally provides oversight of a company's management?

11 What does transparency in corporate governance mean?

12 What does accountability mean in an organization?

13 What is a conflict of interest?

14 What does the letter E represent in ESG?

15 Which issue is part of the environmental aspect of ESG?

16 Which issue belongs to the social aspect of ESG?

17 Which issue is part of the governance aspect of ESG?

18 What is the main purpose of ESG reporting?

19 What is digital ethics concerned with?

20 What does data privacy protect?

21 A company legally obtains customer data through a broad consent clause, but customers are unlikely to understand how their data will be used. What is the most ethical response?

22 A factory meets the minimum legal safety standard, but employees report a preventable risk that the law does not specifically address. What should management do?

23 A supplier's contract permits payment delays of 90 days, but the supplier is a small business facing serious cash-flow problems. Which action best reflects ethical judgment?

24 An advertisement technically avoids false statements but uses images and wording that create a misleading impression about product performance. What is the main ethical concern?

25 A company publicly values teamwork, but its bonus system rewards only individual sales results. What is the most likely consequence?

26 An employee discovers that a manager is manipulating quality reports. The organization has a confidential reporting channel. What should the employee generally do first?

27 A project manager must choose between meeting an aggressive deadline and conducting a required quality review. Which decision best demonstrates ethical leadership?

28 A supervisor gives a preferred employee flexible treatment for the same policy violation that resulted in discipline for another employee. Which principle is most directly compromised?

29 A board is evaluating a major acquisition proposed by the chief executive, who owns shares in the target company. What is the most appropriate governance response?

30 A company has an ethics code, but employees receive no training and managers face no consequences for violations. What is the main weakness?

31 A whistleblower reports financial irregularities, but senior managers discourage investigation because the company is preparing for an investor presentation. What should an effective board do?

32 Which control most effectively reduces the risk that one employee can create and approve a fraudulent payment?

33 A board receives performance reports that show only favorable indicators, while negative customer data is excluded. Which governance practice is most needed?

34 A company reduces its reported emissions by moving a polluting activity to an independent supplier without changing total production. This practice is best described as:

35 A company wants to improve the social dimension of its ESG performance. Which initiative is most directly relevant?

36 An ESG report highlights a company's recycling program but omits a major increase in hazardous waste. What is the primary concern?

37 A company is selecting between two suppliers. Supplier A is cheaper but has repeated labor-rights violations, while Supplier B has stronger labor practices at a moderate additional cost. Which ESG approach is most appropriate?

38 A board links executive bonuses to reducing emissions, improving injury rates, and meeting audit requirements. What is the main benefit of this design?

39 An AI hiring tool consistently recommends fewer candidates from a particular demographic group. What should the organization do before using it further?

40 A manager uses a generative AI tool to summarize confidential employee complaints. What is the most important initial consideration?

41 A company legally purchases customer data from a broker, although the customers were not clearly informed that their data could be resold. Which assessment is most ethically defensible?

42 A manager discovers that a proposed factory location satisfies every environmental regulation but would expose a low-income community to substantially greater health risks than alternative sites. What should an ethical decision process prioritize?

43 A firm exploits a regulatory loophole to classify long-term workers as independent contractors. The arrangement has not yet been ruled illegal. Which conclusion best reflects the law-ethics distinction?

44 A pharmaceutical company legally delays announcing an adverse trial result until after a major investor presentation. Which principle most strongly indicates an ethical problem?

45 An organization publicly emphasizes integrity, but its promotion system rewards employees who meet aggressive targets despite repeated customer complaints. What is the most likely organizational effect?

46 A global company’s headquarters requires one uniform anti-gift policy, while a local subsidiary operates in a culture where modest ceremonial gifts are customary. Which approach best balances consistency and cultural sensitivity?

47 Employees remain silent about a safety defect because previous whistleblowers were excluded from important projects. Which diagnosis best explains the ethical failure?

48 A sales team can meet quarterly goals either by improving service quality or by pressuring customers into unsuitable upgrades. Which control most effectively aligns behavior with organizational values?

49 A board approves a major acquisition after receiving management’s favorable analysis, but the analysis omits known integration risks. Which governance improvement is most direct?

50 A board’s audit committee oversees financial reporting but also approves consulting contracts with the external auditor. What is the principal ethical governance concern?

51 A CEO receives a performance bonus based on a single-year revenue target, while the board knows that meeting it requires aggressive discounting and unusually risky contracts. Which governance response is strongest?

52 A board learns that a senior executive concealed a material conflict of interest in a supplier selection process. Which response best demonstrates ethical accountability?

53 A company’s compliance department reports directly to the chief legal officer, who also advises executives involved in a misconduct investigation. What structural change would most improve independence?

54 A company reports a substantial reduction in operational emissions but excludes emissions from purchased materials that constitute most of its climate impact. What is the strongest ESG criticism?

55 An investor compares two firms: one has high emissions but a credible reduction plan, while the other has low current emissions because it outsources production to a highly polluting supplier. Which ESG assessment is most appropriate?

56 A manufacturer improves worker safety at its own plants but buys from suppliers with repeated evidence of forced labor. Which conclusion best follows?

57 A company links executive pay to ESG performance using a single employee-engagement survey score. What is the main design weakness?

58 A mining company funds a community program while continuing operations that contaminate local water and provides limited information about the risks. Which judgment is most defensible?

59 A bank deploys a credit model that has similar accuracy across demographic groups but produces systematically lower approval rates for one protected group. What should the bank do first?

60 An organization uses a generative AI system to draft legal notices. The system produces fluent text but occasionally invents statutes and case citations. Which control is most appropriate?