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CIMAPRA19-P03-1 Exam - Topic 1 Question 45 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam
Question #: 45
Topic #: 1
[All CIMAPRA19-P03-1 Questions]

C Ltd is a private, family-owned company which is hoping to become listed on a recognised Stock Exchange within the next two years. At the moment, the Board of Directors comprises five directors; four of whom are from the founding family and all of whom are involved in the day-to-day running of the business. The remaining director obtained a seat on the Board threeyearsagoas a condition of an investment by a venture capital fund.

The Board meets in half-day sessionsonce a fortnight and the Board meetings are reasonably well run. All decisions are taken by the Board as a whole. There are no sub-committees.

Which of the following steps would it be appropriate for C Ltd to take in the light of the proposed listing?

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Suggested Answer: A, B, C

by Bernardo at May 13, 2024, 04:30 AM

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Trinidad
3 months ago
10-year contracts? That seems a bit too long, right?
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Gearldine
3 months ago
Setting up sub-committees sounds like a smart move!
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Paulene
3 months ago
Really? Removing the VC director seems extreme.
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Letha
4 months ago
I agree, having NEDs is crucial for transparency!
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Elenore
4 months ago
They definitely need more independent directors on the Board.
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Annabelle
4 months ago
Setting up sub-committees seems like a common practice for listed companies, but I wonder if three is enough or if they need more.
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Yvonne
4 months ago
I feel like removing the venture capital director might be too drastic; they could still bring valuable insights, right?
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Tran
4 months ago
I think appointing a NED as Chair could help with objectivity, but I can't recall if that's a requirement for listing.
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Edelmira
5 months ago
I remember we discussed the importance of having independent non-executive directors for better governance, but I'm not sure if 50% is the right target.
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Dahlia
5 months ago
I feel pretty confident about this one. Appointing independent non-executive directors and setting up the key sub-committees seem like the obvious steps for C Ltd to take. The other options don't seem as relevant or appropriate.
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Kathrine
5 months ago
Okay, I've got some ideas here. I think appointing independent non-executive directors and setting up the key sub-committees would be a good start. But I'm not sure about the other options - I'll need to review the requirements for listed companies in more detail.
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Dorsey
5 months ago
Hmm, I'm a bit unsure about this one. There are a lot of options to consider, and I'm not entirely sure which ones would be the most appropriate for C Ltd's situation. I'll need to think it through carefully.
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Bernardine
5 months ago
This looks like a pretty straightforward corporate governance question. I think the key is to focus on the requirements for listed companies and how C Ltd can prepare for that.
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Noah
5 months ago
This is a tricky one. I'm not too familiar with the specific governance requirements for listed companies, so I'll need to do some research to make sure I understand the context properly before answering.
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Ronnie
5 months ago
I'm feeling a little lost on this one. The options seem pretty similar, and I'm not sure I fully understand the difference between an Increment and the other Agile terms. Maybe I should review my notes before answering.
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Nana
5 months ago
I'm pretty sure the originating UAC sends an INVITE message to the UAS in a SIP direct call setup. That's the first step in the call setup process, right?
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Tori
5 months ago
I'm not comfortable with the solution here. Deleting system directories is risky and could cause major issues. I'll need to research this more before attempting anything.
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Arthur
9 months ago
Option C is a bit harsh. The venture capital director might have valuable insights to offer. Why not keep them on and let the independent NEDs provide the necessary balance?
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Milly
10 months ago
Hmm, option B - appointing an independent NED as Chair - that's a bold move. Gotta love a company that's not afraid to shake things up!
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Myrtie
10 months ago
Option F? Really? An 'agenda setting' sub-committee of the executive directors? That's just letting the foxes guard the henhouse!
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Reena
8 months ago
C) Insist that the venture capital company director be removed as he is not necessarily motivated to act in the best interests of C Ltd.
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Vincent
8 months ago
B) Appoint one of the NEDs as Chair of the Board.
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Nobuko
8 months ago
C) Insist that the venture capital company director be removed as he is not necessarily motivated to act in the best interests of C Ltd.
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Dottie
9 months ago
A) Appoint enough independent non-executive directors (NEDs) that they make up at least 50% of the Board.
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Luisa
9 months ago
B) Appoint one of the NEDs as Chair of the Board.
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Asha
9 months ago
A) Appoint enough independent non-executive directors (NEDs) that they make up at least 50% of the Board.
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Sheron
10 months ago
C Ltd should definitely avoid option E. Locking in the executive directors for 10 years is a recipe for stagnation and lack of flexibility.
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King
9 months ago
D) Set up at least three sub-committees namely remuneration, nomination, and audit committees.
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Lucia
9 months ago
C) Insist that the venture capital company director be removed as he is not necessarily motivated to act in the best interests of C Ltd.
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Nicolette
10 months ago
B) Appoint one of the NEDs as Chair of the Board.
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Alonzo
10 months ago
A) Appoint enough independent non-executive directors (NEDs) that they make up at least 50% of the Board.
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Sheron
10 months ago
Option D sounds like a good idea, but setting up too many sub-committees might overcomplicate the Board's structure at this stage. Baby steps, folks!
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Kaycee
9 months ago
User 3
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Raul
10 months ago
User 2
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Shaun
10 months ago
I'm not so sure about appointing one of the NEDs as Chair of the Board. What do you think, Vincent and Leontine?
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Gladys
11 months ago
The correct answer is A. Appointing at least 50% independent non-executive directors is crucial for good corporate governance as they can provide an objective and impartial perspective.
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Leontine
11 months ago
I agree with you, Vincent. Having independent directors can bring fresh perspectives and ensure better governance.
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Vincent
11 months ago
I think it would be a good idea to appoint independent non-executive directors to make up at least 50% of the Board.
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