CIMA Exam CIMAPRA19-P03-1 Topic 2 Question 55 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 55
Topic #: 2

COM is a well established company in the construction industry The company was founded by the Mac family 30 years ago and several family members still serve on the Board The company obtained a listing five years ago The Board has an appropriate balance between executive and non-executive members It also has audit remuneration and nomination committees The average age of board members is 68

COM is profitable but profit margins have been falling steadily and this year's revenues are lower than it was achieved last year The Board recognis thai it does not have a long term strategy in place and has been losing business to newer, more aggressive competitors

Which THREE of the following statements are correct?

AThe remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

BThe nomination committee should have had a succession plan in place for directors.

CThe nomination committee should be operating for the benefit of the directors.

DThe audit committee should have alerted the Board to the impact of falling profit margins

EThe non-executive directors should have challenged the lack of long term strategic planning

Show Suggested Answer

Suggested Answer: A, B, E

by Viola at Sep 18, 2024, 11:21 AM

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Avery

2 months ago

The board members must be napping if their average age is 68. Time for some fresh blood!

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Veronique

19 days ago

B) The nomination committee should have had a succession plan in place for directors.

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Arlyne

21 days ago

The board needs younger members with fresh ideas.

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Clare

28 days ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Brice

1 months ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Kimbery

2 months ago

The non-executive directors should have challenged the lack of long-term strategic planning. That's their job, isn't it? They need to earn their keep.

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Reiko

28 days ago

D) The audit committee should have alerted the Board to the impact of falling profit margins

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Janna

1 months ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Horace

1 months ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Joanne

2 months ago

I'm not so sure about the nomination committee operating for the benefit of the directors. Shouldn't they be looking out for the company's best interests?

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Eulah

2 months ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Christa

2 months ago

B) The nomination committee should have had a succession plan in place for directors.

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Yvonne

2 months ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Aron

2 months ago

The audit committee should have definitely alerted the board to the impact of falling profit margins. That's a crucial oversight.

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Melina

2 months ago

I believe option E is correct as well. Non-executive directors should have challenged the lack of long term strategic planning.

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Nathan

2 months ago

I agree with Lenny. Option D is also correct because the audit committee should have alerted the Board about falling profit margins.

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Geraldo

3 months ago

Absolutely, the nomination committee should have had a succession plan in place for the directors. This oversight is concerning.

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Bettina

2 months ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Verda

2 months ago

B) The nomination committee should have had a succession plan in place for directors.

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Ben

2 months ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Cristal

3 months ago

The remuneration committee should definitely consider incentives like share options to encourage the board to focus on the company's long-term strategy. That's a no-brainer.

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Jesus

3 months ago

E) The non-executive directors should have challenged the lack of long term strategic planning

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Arlie

3 months ago

A) The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy

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Lenny

3 months ago

I think option A is correct because it's important to incentivize the Board to focus on long term strategy.

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