Acca paper F1 fia diploma in Accounting and Business Accountant in Business (AB/fab) exam kit


(2 marks)  139 To encourage Executive Directors to operate in the best interests of the shareholders



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(2 marks) 
139 To encourage Executive Directors to operate in the best interests of the shareholders, 
they could: 

be given a high basic salary 

receive share options based on both individual and company’s performance 

be entitled to large payment upon resignation or termination 

be asked to attend AGMs 
(2 marks)
140 Corporate social responsibility refers to the idea that a company should: 

play an active part in the social life of the local neighbourhood 

be sensitive to the needs of all stakeholders 

be alert to the social needs of all employees 

act responsibly in relation to shareholders’ overall needs – not just their financial 
needs 
(2 marks)
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P AP E R F 1 ( F A B ) :
AC COU N TAN T IN B US INES S
 
32
KA P LA N P UBL I SH IN G 
141 Which of the following would best explain the concept of sustainable development? 

Starting business on the developed countries where the economic climate is 
conducive to trade 

Development which meets the needs of the present without compromising the 
ability of future generations to meet their own needs 

Sustaining the production at the level of maximum capacity 

Developing the business by signing long-term contracts with suppliers 
(2 marks)
142 Modern view on Corporate Social Responsibility is: 

it is a way to further a company’s business and attract additional shareholders 

it is necessary to reduce product liability claims 

a company must give part of its profits to charity 

social responsibility is incompatible with the objective of maximising shareholder’s 
wealth

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