Skip to content

ACCA Strategic Professional · Strategic Business Leader · Governance scope and approaches

A listed retailer's finance director discovers that the chief executive has hidden supplier rebate liabilities. She raises it with the chair, who tells her to stay quiet to protect the share price. Which mechanism would best have helped the issue reach independent oversight?

A confidential whistleblowing channel to the audit committee chair would best help. It lets concerns bypass a conflicted chair and reach independent directors who can investigate, which addresses the suppression of information that caused the governance failure.

  1. AA confidential whistleblowing channel reporting to the audit committee chairCorrect
  2. BA higher dividend to reassure shareholders
  3. CRotating the finance director to another subsidiary
  4. DIncreasing the chief executive's share options

Explanation

A whistleblowing route to an independent audit committee chair bypasses a conflicted chair and lets concerns be investigated. Dividends, rotation and more options do not address suppression of information, and options could worsen the incentive to hide liabilities.

Did you get it right without looking?

One question tells you little. A timed set on Governance scope and approaches shows your real accuracy, how long you take and where you lose marks.

Practise Governance scope and approachesFree diagnostic mock

More Governance scope and approaches questions