IoD Role of the Director & Board Practice Questions - IoD Certificate in Company Direction - Award in Role of the Director and the Board Exam - IoD Role of the Director & Board Practice Questions - IoD Certificate in Company Direction - Award in Role of the Director and the Board Exam

Question 1

Under Companies Act 2006 section 171, what is the primary statutory duty of a company director?

To act only within the powers conferred by the company's constitution and for the purposes for which those powers are conferred To maximise short-term distributable profits for current shareholders regardless of other stakeholders To follow majority shareholder instructions even when they exceed the articles To delegate all decision-making to the chief executive without personal accountability

Correct Answer:

To act only within the powers conferred by the company's constitution and for the purposes for which those powers are conferred

Question 2

A director approves a transaction that is outside the objects clause in the company's articles. Which duty is most directly breached?

The duty to declare interests under section 177 only The duty to act within powers under section 171 The duty regarding third-party benefits under section 176 only The duty of independent judgment under section 173 only

Correct Answer:

The duty to act within powers under section 171

Question 3

Section 172 CA 2006 requires directors to promote the success of the company for the benefit of members as a whole. How should 'success' normally be understood in board practice?

As delivering the highest possible dividend in the current financial year As implementing whatever the largest shareholder requests at each meeting As long-term value creation judged in the round, not merely immediate share price or dividend outcomes As avoiding all commercial risk so that capital is never exposed to loss

Correct Answer:

As long-term value creation judged in the round, not merely immediate share price or dividend outcomes

Question 4

Which factor is expressly listed in section 172(1) CA 2006 that directors may consider when promoting the company's success?

The personal tax position of individual directors The electoral preferences of local councillors The market share targets of a competitor The likely consequences of any decision in the long term

Correct Answer:

The likely consequences of any decision in the long term

Question 5

When applying section 172, which stakeholder interests may directors take into account?

Employees, suppliers, customers, community and environmental impact, and business conduct reputation Only institutional investors with more than three per cent of shares Only creditors after insolvency proceedings have commenced Only executive management recommendations without board scrutiny

Correct Answer:

Employees, suppliers, customers, community and environmental impact, and business conduct reputation

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About this Exam

Prepare with the IoD Role of the Director & Board Practice Questions - IoD Certificate in Company Direction - Award in Role of the Director and the Board Exam practice quiz. This question bank includes 100 questions covering board, company, governance, section, and director. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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IoD Role of the Director & Board Practice Questions - IoD Certificate in Company Direction - Award in Role of the Director and the Board Exam

This practice set contains 100 questions from the matching question bank and focuses on board, company, governance, section, and director. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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IoD Role of the Director & Board Practice Questions - IoD Certificate in Company Direction - Award in Role of the Director and the Board Exam

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