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NACD Sample Test Questions

NACD Sample Test Questions

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cp~2008
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87 views1 page

NACD Sample Test Questions

NACD Sample Test Questions

Uploaded by

cp~2008
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
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Test Your Knowledge

Below are some sample questions from the NACD Directorship Certification Exam, as they appear in the Study Guide.

1. Which best describes the two most important 6. How should directors communicate with proxy advisors
fiduciary duties of a board member? such as Institutional Shareholder Services and Glass,
a. The duties of financial responsibility and accuracy Lewis & Co.?
b. The duties of loyalty and care a. They should not independently communicate directly with
c. The duties of being prepared and responsible for board work proxy advisors on behalf of the company.
d. The duties of ethics and integrity b. They should only discuss publicly disclosed
information with proxy advisors.
2. Which function is the primary role of the audit committee? c. They should only discuss information with proxy advisors in a
a. Proposing the processes used by outside auditors public setting.
b. Directing that the financial statements are filed in a timely d. They should only discuss the industry with proxy advisors.
manner and meet the requirements of the US Securities and
Exchange Commission 7. What US Securities and Exchange Commission filing must
c. Providing oversight of the financial reporting process, the be submitted within 10 days by anyone who acquires
audit process, and the company’s system of internal controls beneficial ownership of more than 5 percent of any class
d. Confirming that each major transaction meets applicable of publicly traded securities in a public company?
accounting and regulatory standards a. Form 4
b. 13G
3. Which required disclosure to investors contains the c. Schedule 14D
Compensation Discussion & Analysis? d. 13D
a. The proxy statement
b. Form 10-K 8. What role do Glass, Lewis & Co. and Institutional
c. Form 10-Q Shareholder Services play in the proxy vote?
d. The annual report a. They advocate for board disruption to force refreshment.
b. They advise shareholders on director nominees,
4. During a review of the company’s strategic plan, which compensation, and governance.
factor would raise the greatest concern? c. They recommend increases in compensation to promote
a. Lack of adequate capital (human and/or financial) to meet board stability.
the needs of the plan d. They sell research to corporate boards in exchange for high
b. Lack of detailed 10-year financial plans company valuations.
c. Lack of consideration of acquisition targets to generate growth
d. Lack of management unanimity 9. Which is an essential element of an effective crisis
management plan?
5. Which line item of the income statement is necessary to a. Competitive analysis summary
calculate gross margin? b. Communications plan
a. General and administrative expenses c. Employee pension plan document
b. Interest expense d. Internal audit contingency plan
c. Cost of goods sold
d. Sales and marketing expenses 10. Which action by a corporate director is most appropriate?
a. Directing the vice president of talent management to
terminate an employee
b. Speaking to the media about a company press release
c. Directing management to utilize a specific vendor
d. Meeting with an investor in the presence of executive
management

To learn more, visit NACDonline.org/Certification


Answers to practice test questions: 1. b; 2. c; 3. a; 4. a; 5. c; 6. a; 7. d; 8. b; 9. b; 10. d

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