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Knowledge Assessment

Test Your Knowledge On Company Governance

Please complete the following questionnaire to test your knowledge on company governance. It takes, on average 30 to 60 minutes.

It is vital for company founders and directors to possess a strong foundation of governance knowledge as it not only ensures compliance with legal and ethical standards but also fosters trust among stakeholders. This knowledge empowers leaders to make informed, strategic decisions, manage risks effectively, and navigate conflicts of interest, ultimately contributing to the company’s long-term sustainability, reputation, and success.

Duration

30 – 60 min

Steps

9 sections

Pass mark

90%

MJ Governance Knowledge Questionnaire Form (V.2.1)

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Personal Details
Shareholder Rights, Duties And Liabilities
CEO/Managing Director Rights, Duties And Liabilities
Board Director Rights, Duties And Liabilities
Board Rights, Duties And Liabilities
Board Member Roles
Company Constitution And Shareholder Agreement
Board Charter
Policies

Step 1 - Personal Details

First Name

Last Name

Step 2 - Shareholders Rights, Duties And Liabilities

2-1. As a shareholder, do you have an obligation to ensure the company has the right officers in place (e.g. the CEO and their executive team)?

Yes

2-2. As a shareholder, do you have a duty to run the business effectively and be responsible for business decisions?

Yes

2-3. As a shareholder, can you be held liable and responsible for the company debts?

Yes

2-4. Shareholder rights includes

Attending shareholders meetings

Voting on key issues

Selling their shares

Receiving company reports and announcements

Participating in corporate actions (such as share buybacks or mergers)

Receiving dividends and other distributions

Accessing Sensitive Company Information

S2_4 Int Calculation

S2_4 Score

S2 Section Score

S2 Section Percentage

Step 3 - CEO Rights, Duties And Liabilities

3-1. Is it mandatory for the CEO to be the chair of the Board?

Yes

3-2. Is it mandatory for the CEO to be a member of the Board?

Yes

3-3. Do Board meetings typically have a standing invitation for the CEO?

Yes

3-4. Which of the following statement is true?

The CEO operates under a delegated authority by the Board, and for exceptions outside of that delegated authority, can receive approval to proceed with any Director approval

The CEO operates under a delegated authority by the Board, and this can be changed from time to time by the Chair. Delegated authorities must also be extended to other C-Suite executives

The CEO operates under a delegated authority by the Board which should only be changed by a majority decision by the Directors

3-5. What information does the CEO report to the Board?

Organisation's corporate performance, financial condition, operations and prospects

Any material developments in the organisation’s affairs, operations and business

Any topic that requires Board's oversight

Any topic that he/she considers to be of interest

S3_5 Int Calculation

S3_5 Score

S3 Section Score

S3 Section Percentage

Step 4 - Board Directors Rights, Duties And Liabilities

4-1. As a director, can you be held liable and responsible for the company debts?

Yes

4-2. Can Board Members rely upon third-party reports (such as from Auditors or Accountants) for decision-making?

These reports absolve Directors of their responsibilities of due diligence

It is always the Directors' responsibility to make informed decisions, and they cannot delegate their duty to rely upon third party reports

It is prohibited for Directors to have any reference to external reports to inform them in making major business decisions

4-3. In order to fulfil their duty of care, skill and diligence, can a Director seek independent professional advice?

Yes

4-4. When seeking independent professional advice, is a Director typically personally liable for the fees?

Yes

4-5. Under which conditions can Directors engage directly with the auditors (internal and external)?

Engage through the Chair of the Board

Engage with the Chair of the Board's authorisation, and the presence of Executive Management if required

Engage with the Chair of the Board's authorisation, without the presence of Executive Management

S4_5 Int Calculation

S4_5 Score

4-6. What does fiduciary duty mean for a Director?

Acceptance of responsibility to act in the best interest of the Company

Acceptance of responsibility to act in the best interest of the Shareholders

Acceptance of responsibility to act in the best interest of the Company's Customers

S4_6 Int Calculation

S4_6 Score

4-7. Which of the following duties are Director's duties?

Duty to act in good faith

Duty to act in the best interest of the Company's staff

Duty to exercise powers and use information for a proper purpose, not personal profit

Duty to avoid conflict of interest

Duty to retain relevant level of financial expertise to understand and support CEO decision-making

Duty to prevent insolvent trading

S4_7 Int Calculation

S4_7 Score

4-8. Which one of the following Director's duties has the highest seniority?

Corporation Act duties

Fiduciary duties

Statutory duties

There is no seniority

4-9. Which proceedings against Directors demand a higher standard of proof?

Criminal proceeding

Civil proceeding

4-10. Can criminal penalties against directors result in imprisonment?

Yes

S4 Section Score

S4 Section Percentage

Step 5 - Board Rights, Duties, Liabilities and Practice

5-1. Which interests must the Board serve honestly, fairly and diligently?

The Company

The Shareholders

The Customers

All Third Party Suppliers and Consultants

The broader community

S5_1 Int Calculation

S5_1 Score

5-2. Which following statement is true?

The Board can make decisions to increase or decrease the share capital of the company, without informing the Shareholders

The Board can make decisions to increase or decrease the share capital of the company, only informing the Shareholders but without requiring their approval

The Board can make decisions to increase or decrease the share capital of the company, with the approval of the Shareholders

5-3. Which following statement is true?

The Board determine the amount of dividends, with the approval of the Shareholders

The Board determine the amount of dividends, without the approval of the Shareholders

The Shareholders vote the amount of dividends based on financial metrics

5-4. Does the Board typically approve the Company's Code of Conduct and ethical standards?

Yes

5-5. Does the Board typically approve the Company's Risk Management framework?

Yes

5-6. What does in-camera mean in a Board meeting?

The Board meeting cannot be recorded

Management cannot attend (typically because of a conflict)

The Board meeting needs to be recorded for governance and compliance purposes

There are not enough Directors for a meeting to occur

5-7. What is the Board responsible for?

The governance and management of the Company

Compliance controls

Codes of conduct

Company policies

S5_7 Int Calculation

S5_7 Score

5-8. When typically should the performance of the Board be reviewed?

When required - on an ad-hoc basis

Minimum every 3 years

Minimum every year

Minimum every 6 months

5-9. What should be included in the Board Review?

The processes of the Board and its Committees

The Board's performance

Each Director's performance

The CEO's performance

S5_9 Int Calculation

S5_9 Score

S5 Section Score

S5 Section Percentage

Step 6 - Board Member Roles

6-1. Which of the following statement(s) can be used to typically define an Independent Director?

An Independent Director is a non-executive director that receives performance-based remuneration (including options or performance rights) from, or participates in an employee incentive scheme

An Independent Director is a non-executive director that has no less than 6 months conducting activity in a material business relationship with the company

An Independent Director is a non-executive director who is independent of management and free of any interest, position, or relationship that might influence, or reasonably be perceived to influence, issues before the Board

An Independent Director is a non-executive director who has been a director of the Company for such a period that their independence may have been compromised

S6_1 Int Calculation

S6_1 Score

6-2. What are the benefits of having a Chair of the Board from within the company?

Deep understanding of day-to-day operations

Deep industry expertise

Proper Independence

Capable of proper management decision making

S6_2 Int Calculation

S6_2 Score

6-3. What are the typical responsibilities of the Chair of the Board?

Setting the frame, agenda and the objectives of any Board meeting

Addressing conflicts, apologies and past minutes questions during Board meeting

Ensuring a unanimous decision is always reached on a board resolution

Representing the Board to various stakeholders and the public

Representing the Board to Shareholders

Disciplining staff where they are not compliant with legislation

Leading the Board, including liaising with and counselling Board Members

S6_3 Int Calculation

S6_3 Score

6-4. What are the typical responsibilities of the Board Secretary?

Managing Director termination, removal and handover process

Creating and managing the Director training and development program

Organising and scheduling meetings

Distributing information in a timely fashion to ensure Directors have adequate time to make informed decisions

Creating the Board Meeting Agendas

Creating financial reports, including financial planning or budgets

Fielding Director Enquiries

S6_4 Int Calculation

S6_4 Score

6-5. Which of the following skills are typically valuable to be an effective Board Member?

Strategic expertise

Accounting/Financial literacy

Legal skills

Business development skills

Risk management and mitigation skills

Team management skills

Capital markets and M&A experience

S6_5 Int Calculation

S6_5 Score

S6 Section Score

S6 Section Percentage

Step 7 - Company Constitution And Shareholder Agreement

7-1. Is it mandatory to lodge both the Constitution and the Shareholders Agreement with the Australian Securities and Investments Commission (ASIC)?

Yes

7-2. Despite the fact that the Constitution is a mandatory document, can the Shareholder Agreement override it in some circumstances?

Yes

7-3. If one had seniority, which document would typically be senior for Shareholders?

Shareholder Agreement

Company Constitution

None - they are of equal importance

7-4. Is it compulsory under the Constitution for the Chair of Board to hold a casting vote to prevent decision deadlock (where there are an even number of Directors on the Board)?

Yes

S7 Section Score

S7 Section Percentage

Step 8 - Board Charter

8-1. Who approves the Board Charter?

The Board Members

The Shareholders

The Company Executives

The Legal Team

None Of The Above

8-2. Which are the main purposes of a Board Charter?

Establishing Key Board Functions

Improving Board Governance Processes

Improving Board Governance Effectiveness

Defining Major Business Operations Framework (Mergers, Acquisitions)

Detailing the Vision and Mission Statements of the Company

S8_2 Int Calculation

S8_2 Score

8-3. What are some of the additional purposes of a Board Charter?

Outlining salary parameters

Promoting high standards of corporate governance

Clarifying the role and responsibilities of the Board

Enabling the Board to provide strategic guidance and effective management oversight

S8_3 Int Calculation

S8_3 Score

8-4. What does the Board Charter typically outline in terms of guidelines to the Board?

How to build a Strategic Plan

How to compose the Board

What are the Board Member Roles and Responsbilities

What are all the Management's Roles and Responsibilities

What are the Board and Company's Ethical Standards

How to perform Staff Performance Reviews

S8_4 Int Calculation

S8_4 Score

8-5. Which following statement is false?

The Board Charter grants the Board authority to establish Board Commitees as it sees fit

Board Committees have autonomy to make independent strategic decisions, even if they may conflict with the Board's overall governance strategy

Board Committees only act as advisory groups to the Board and have no decision-making power

8-6. Can Boards Committees make company decisions without reference to the Board?

Yes

S8 Section Score

S8 Section Percentage

Step 9 - Policies

9-1. Who defines the Board remuneration policy?

The Board (often supported by a subcommittee responsible for remuneration that reports to the Board for its approval)

The Managing Director / CEO

The CFO

The Shareholders

9-2. Who typically determines the Managing Director/CEO remuneration?

The Board (often supported by a subcommittee responsible for remuneration that reports to the Board for its approval)

The Managing Director / CEO

The CFO

The Shareholders

9-3. Who approves the company payroll, budget, and bonus / incentive programs?

The Board (often supported by a subcommittee responsible for remuneration that reports to the Board for its approval)

The Managing Director / CEO

The CFO

The Shareholders

S9 Section Score

S9 Section Percentage

Total Sections Score

Total Sections Percentage

A score of 90% or more is required to pass the assessment.

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