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AICD Company Directors Course Exam (GAICD)

Practice Questions
Exam Review

Key Facts: Foundations of Directorship Exam

100

Practice Questions

OpenExamPrep

30

Official Questions

AICD

65%

Pass Mark

AICD

1.0 hr

Time Limit

AICD

The AICD Foundations of Directorship assessment is a 30-question multiple-choice test on governance basics, core finance, and risk. It has a 65% passing score. This prep includes 100 practice questions.

Sample Foundations of Directorship Practice Questions

Try these sample questions to review concepts for the Foundations of Directorship exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1What is the primary role of a board of directors?
A.Directly executing marketing campaigns
B.Managing the day-to-day operations of the company
C.Drafting individual employee contracts
D.Providing strategic oversight and monitoring organizational performance.
Explanation: The board's role is to provide long-term strategic direction and monitor management's execution of that strategy. It is not involved in day-to-day operations or executing lower-level tasks, which are delegated to the CEO and management team.
2Who is typically responsible for the day-to-day management of a company?
A.The non-executive directors
B.The external auditor
C.The Chief Executive Officer and executive management.
D.The Chair of the board
Explanation: The board delegates the authority for day-to-day operations of the company to the Chief Executive Officer (CEO), who in turn delegates responsibilities to the executive management team. The board monitors their performance against agreed goals.
3What defines a non-executive director (NED)?
A.A director who has no voting rights at board meetings
B.A director who only attends annual general meetings
C.A director who is also the Chief Financial Officer
D.A director who is not an employee of the company and does not participate in its daily management.
Explanation: A non-executive director is a member of the board of directors who does not form part of the executive management team. They are not employees of the company and provide independent oversight and challenge to management.
4What is the primary responsibility of the Chair of the Board?
A.Undertaking the day-to-day operations of the company
B.Acting as the lead legal counsel for the firm
C.Leading the board, facilitating effective meetings, and managing board performance.
D.Approving the expense reports of all middle managers
Explanation: The Chair's primary role is to lead the board, manage its processes, ensure that meetings are run effectively, and facilitate open discussion. The Chair also acts as the main link between the board and the CEO.
5What is a key role of the Company Secretary in Australian corporate governance?
A.Approving corporate strategy and mergers
B.Directing the sales and marketing teams
C.Auditing the annual financial statements
D.Ensuring compliance with board procedures and maintaining regulatory registers.
Explanation: The Company Secretary plays a crucial role in advising the board on governance matters, ensuring that board procedures are followed, coordinating board meetings, and maintaining the company's statutory records and registers.
6Which Australian government body administers the Corporations Act 2001?
A.Australian Prudential Regulation Authority (APRA)
B.Australian Competition and Consumer Commission (ACCC)
C.Australian Taxation Office (ATO)
D.Australian Securities and Investments Commission (ASIC).
Explanation: ASIC is Australia's corporate, markets, and financial services regulator. It is responsible for administering the Corporations Act 2001 and monitoring corporate compliance.
7What is the primary purpose of board meeting minutes?
A.To serve as a marketing tool for potential investors
B.To provide a word-for-word transcript of every conversation in the meeting
C.To serve as an official and legal record of the board's resolutions and key decisions.
D.To outline the detailed operational plans of management
Explanation: Minutes are the legal record of the meetings of the board of directors. Under the Corporations Act 2001, companies are required to keep minutes of meetings, and once signed by the Chair, they serve as prima facie evidence of the proceedings.
8Why does a board establish committees, such as an Audit and Risk Committee?
A.To replace the decision-making authority of the full board
B.To manage the day-to-day work of the finance team
C.To focus on specific governance areas in detail and make recommendations to the full board.
D.To reduce the legal liability of the non-committee directors
Explanation: Board committees allow a subset of directors to apply detailed focus to critical areas like audit, risk, remuneration, and nominations. This efficiency helps the board manage its workload and bring deeper expertise to key issues, reporting back with recommendations.
9What are 'replaceable rules' under the Corporations Act 2001?
A.A set of default governance rules that apply to a company if it does not adopt its own constitution.
B.Regulations that dictate which products a company can sell
C.Rules that allow shareholders to replace directors at any time without a vote
D.Internal management policies that can be altered by any employee
Explanation: The Corporations Act contains a set of default rules for internal management called 'replaceable rules'. A company can choose to rely on these rules, adopt its own constitution, or use a combination of both.
10What is a 'de facto director' under Australian law?
A.A consultant who provides occasional expert legal advice to the board
B.A shareholder who holds more than 50% of the voting shares
C.A person who acts as a director even though they have not been formally appointed.
D.A director who has resigned but still receives board papers
Explanation: Under the Corporations Act 2001, a director includes a person who is not formally appointed but acts in the position of a director. De facto directors are subject to the same legal duties and liabilities as formally appointed directors.

About the Foundations of Directorship Exam

The AICD Foundations of Directorship Assessment is the entry-level theory test for new directors, executives, and company secretaries in Australia. It covers foundational topics across three modules: governance (the role of the board, legal obligations of directors, board operations), finance (understanding balance sheets, cash flow, profit & loss, and basic financial health questions), and risk/strategy (the board's role in guiding strategy and monitoring key business risks).

Exam sponsor: Australian Institute of Company Directors (AICD). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Closed-book online multiple-choice quiz administered via the AICD student portal.

Time Limit

1.0 hour

Passing Score

65%

Exam / Certification Fees

Typically included in course enrollment fees or approx. $200 - $400 AUD for standalone attempts

Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

35%

Governance Basics

Board roles, director legal duties under the Corporations Act, board meetings, and board-executive relationships

35%

Finance Fundamentals

Reading balance sheets, profit and loss, cash flows, and key questions for assessing financial health

30%

Introduction to Risk & Strategy

Strategy principles for boards, identifying operational and financial risks, and compliance monitoring

Preparing for the Foundations of Directorship Exam

What You Need to Know

  • Passing score: 65%
  • Assessment: Closed-book online multiple-choice quiz administered via the AICD student portal.
  • Time limit: 1.0 hour
  • Exam / certification fees: Typically included in course enrollment fees or approx. $200 - $400 AUD for standalone attempts Official sources

Using Our Practice Resources

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

Foundations of Directorship: Suggested Study Strategy

1Learn the difference between executive directors (involved in daily management) and non-executive directors (independent oversight role)
2Understand the basic financial equation: Assets = Liabilities + Shareholder's Equity. Always check cash flow statements to verify that profits translate to actual cash
3Study risk registers: understand how risks are scored using likelihood and impact ratings, and how the board monitors these risk thresholds

Frequently Asked Questions

Who is the Foundations of Directorship course for?

It is designed for newly appointed directors, executives seeking to understand board interactions, and small-to-medium enterprise (SME) owners.

What is the format of the assessment?

It is an online multiple-choice assessment consisting of 30 questions, requiring a 65% pass mark.