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CFA Institute Sustainable-Investing Exam - Topic 5 Question 18 Discussion

Which of the following is responsible for ensuring the composition of a company's board is balanced and effective?
B) Nominations Committee
A) Audit Committee
C) Remuneration Committee

CFA Institute Sustainable-Investing Exam - Topic 5 Question 18 Discussion

Actual exam question for CFA Institute's Sustainable-Investing exam
Question #: 18
Topic #: 5
[All Sustainable-Investing Questions]

Which of the following is responsible for ensuring the composition of a company's board is balanced and effective?

Show Suggested Answer Hide Answer
Suggested Answer: B

The Nominations Committee is responsible for ensuring that the composition of a company's board is balanced and effective. This committee is tasked with identifying and recommending new directors and ensuring that the board has the necessary skills, experience, and diversity to oversee the company effectively.ESG Reference: Chapter 5, Page 232 - Governance Factors in the ESG textbook.

Both the EU Paris-Aligned Benchmarks and the EU Climate Transition Benchmarks allow limited investment in fossil fuels, with restrictions aimed at ensuring that such investments contribute to the transition to a low-carbon economy. These benchmarks are designed to help investors transition their portfolios in line with decarbonization goals.ESG Reference: Chapter 8, Page 406 - ESG Integrated Portfolio Construction & Management in the ESG textbook.

Scope 3 carbon emissions, which include indirect emissions from suppliers and consumers, are accounted for under both the UK Task Force on Climate-related Financial Disclosures (TCFD) and the European Union's Sustainable Finance Disclosure Regulation (SFDR). Both frameworks encourage comprehensive disclosure of emissions across the entire value chain.ESG Reference: Chapter 3, Page 133 - Environmental Factors in the ESG textbook.


Contribute your Thoughts:

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Alfred
9 hours ago
I think the Audit Committee has a role too, though.
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Anastacia
6 days ago
I agree, it's all about the nominations!
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Anisha
11 days ago
Definitely B) Nominations Committee! They handle board member selections.
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Sylvie
16 days ago
I had no idea, this is surprising!
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Lynna
21 days ago
Yup, Nominations Committee all the way!
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Tamie
26 days ago
Wait, are you sure? I thought it was the Audit Committee.
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Carlee
1 month ago
Totally agree, they handle board member selections.
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Malika
1 month ago
It's definitely the Nominations Committee.
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Graham
1 month ago
I definitely recall that the Nominations Committee plays a key role in selecting board members, so I’m leaning towards that option.
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Adria
2 months ago
I could be wrong, but I feel like the Remuneration Committee is more about pay and benefits rather than ensuring a balanced board.
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Leandro
2 months ago
I remember a practice question about committees, and I think the Audit Committee mainly deals with financial oversight, not board composition.
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Cletus
2 months ago
I think the Nominations Committee is the right answer since they focus on board composition, but I'm not entirely sure.
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