CIMAPRO19-P03-1 Exam - Topic 5 Question 35 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 35
Topic #: 5

The Board of Directors of VCX, a state-owned electricity company, includes four executive directors the Chief Executive Officer, the Finance Director the Operation Director and the Technical Director

All of the shares in the company vest in the Office of the Minister for Energy, who is entitled to appoint two non-executive directors to the Board It has been alleged that the Minister appoints political "insiders" who have no particular knowledge of. or interest in. the electricity industry

There are three further non-executive directors

* L, who spent seven years as Chief Executive of VCX, but retired from that role two years ago,

* M, who spent several years on the Board of a state electricity company in a different country to VCX but who resigned from it before accepting the position with VCX: and

* N, who is a qualified and experienced professional accountant

In relation to best practice in respect of Corporate Governance, which of the following statements are valid? Select ALL that apply

ANone of the executive directors should be allowed to sit on the Remuneration Committee

BM is unsuitable to be part of the Board because his previous involvement with a similar company in another country is a conflict of interest.

CL can now be considered to be an independent non-executive director

DM and N are both suitable appointees to the Audit Committee

EThe Finance Director should be part of the Audit Committee because of her expertise

FNon-executive directors should be responsible for monitoring the performance of executive management especially with regard to company strategy and objectives

Show Suggested Answer

Suggested Answer: A, D, F

by Amber at Jul 22, 2022, 10:04 AM

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Yuonne

4 months ago

N definitely belongs on the Audit Committee, solid choice!

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Leoma

4 months ago

M's past role shouldn't disqualify him, it's a different country!

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Dick

4 months ago

Wait, L is considered independent now? That seems off.

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Adelle

4 months ago

Totally agree, that’s a conflict of interest waiting to happen.

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Rosina

4 months ago

I think none of the execs should be on the Remuneration Committee.

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Colette

5 months ago

I feel like N's accounting background makes him a strong candidate for the Audit Committee, but I’m not entirely sure about M's suitability.

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Cecil

5 months ago

I practiced a question like this where we debated L's independence, and I think he might not qualify as independent since he was CEO recently.

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Wilda

5 months ago

I'm not sure about M's situation; I thought previous roles in similar companies could be a conflict, but it might depend on the specifics.

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Daron

5 months ago

I remember discussing that executive directors shouldn't be on the Remuneration Committee to avoid conflicts of interest, so A seems valid.

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Garry

5 months ago

This seems straightforward, but I want to make sure I'm not missing anything. I'll review the code and options again to ensure I'm selecting the best solution.

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Josefa

5 months ago

Automation and orchestration, huh? I remember learning about this in class, but I'm a bit fuzzy on the details. I'll need to review my notes to make sure I'm answering this correctly.

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Launa

5 months ago

It could be False, but I'm not confident. I recall DNS issues that affected routing in one of the labs.

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Vernice

5 months ago

I feel confident about this one. The security actions a secure MA, C address can perform are protect, restrict, and shutdown. The one it can't perform is remark.

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