100+ Free IoD Role of the Director & Board Practice Questions

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Sample IoD Role of the Director & Board Practice Questions

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1Under Companies Act 2006 section 171, what is the primary statutory duty of a company director?

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

B.To maximise short-term distributable profits for current shareholders regardless of other stakeholders

C.To follow majority shareholder instructions even when they exceed the articles

D.To delegate all decision-making to the chief executive without personal accountability

Explanation: Section 171 CA 2006 is the gateway duty: directors may exercise powers only as the articles and resolutions permit and for proper purposes. Transactions beyond constitutional authority may be set aside and expose directors to breach claims.

2A director approves a transaction that is outside the objects clause in the company's articles. Which duty is most directly breached?

A.The duty to declare interests under section 177 only

B.The duty to act within powers under section 171

C.The duty regarding third-party benefits under section 176 only

D.The duty of independent judgment under section 173 only

Explanation: Ultra vires or improper-purpose decisions most directly engage section 171, which limits how corporate powers may be used. Conflict and disclosure duties in sections 175–177 may also arise, but exceeding conferred powers is the primary breach here.

3Section 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?

A.As delivering the highest possible dividend in the current financial year

B.As implementing whatever the largest shareholder requests at each meeting

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

D.As avoiding all commercial risk so that capital is never exposed to loss

Explanation: Section 172 frames success for members as a whole, interpreted commercially over time rather than as a single quarter's cash extraction. Directors must weigh the statutory factors, including long-term consequences and stakeholder impacts, when judging what success requires.

4Which factor is expressly listed in section 172(1) CA 2006 that directors may consider when promoting the company's success?

A.The personal tax position of individual directors

B.The electoral preferences of local councillors

C.The market share targets of a competitor

D.The likely consequences of any decision in the long term

Explanation: Section 172(1)(a) expressly requires regard to likely long-term consequences of decisions. That factor anchors enlightened shareholder value by discouraging short-termism that may damage sustainable performance.

5When applying section 172, which stakeholder interests may directors take into account?

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

B.Only institutional investors with more than three per cent of shares

C.Only creditors after insolvency proceedings have commenced

D.Only executive management recommendations without board scrutiny

Explanation: Section 172(1)(b)–(e) lists employees; suppliers and customers; community and environment; and reputation for high standards of business conduct. Fairness between members is a separate factor in section 172(1)(f). These factors inform how directors balance competing interests while promoting company success.

6A board is deciding whether to close a plant with significant local employment. Under section 172, what is the correct governance approach?

A.Ignore employee impact because only shareholders may be considered under company law

B.Weigh long-term company success alongside employee and community consequences, documenting the board's reasoning

C.Defer entirely to the HR director without board-level assessment

D.Approve the closure only if employees waive all statutory rights

Explanation: Plant closure decisions engage section 172's employee and community factors alongside long-term viability. Directors should document how they weighed redundancy impacts, alternatives, and the company's sustainable future before approving material restructurings.

7Section 173 CA 2006 requires directors to exercise independent judgment. What does this duty permit?

A.Always voting exactly as the chair instructs without question

B.Automatically following a shareholders' agreement that removes discretion on every matter

C.Relying on professional advice after the director forms their own view on the decision

D.Abstaining from all decisions where any conflict might theoretically arise

Explanation: Section 173 preserves director autonomy of mind: directors may take advice but must reach their own decision. Blindly following the chair, executives, or a shareholder pact without independent assessment risks breaching this duty.

8A non-executive director consistently votes as directed by the executive team without scrutiny. Which duty is most at risk?

A.The duty to act within powers under section 171 only

B.The duty to file confirmation statements

C.The duty to maintain statutory books at the registered office

D.The duty to exercise independent judgment under section 173

Explanation: NEDs are appointed to scrutinise management, not to rubber-stamp executive proposals. Persistent uncritical voting undermines the board's oversight function and suggests a section 173 failure to exercise independent judgment.

9Section 174 CA 2006 sets the standard for care, skill, and diligence. What dual test applies to directors?

A.The general knowledge, skill and experience reasonably expected of a person carrying out the director's role, and the actual knowledge, skill and experience the director has

B.Only the subjective standard based on whatever experience the director claims privately

C.The standard of a qualified solicitor regardless of the director's role

D.Perfection in outcome, so any commercial loss proves breach

Explanation: Section 174 blends an objective benchmark—what a reasonable director in that role would do—with a subjective element reflecting the director's actual skills and experience. The standard is negligence-based, not a guarantee of commercial success.

10A finance director with extensive accounting experience approves accounts without reviewing key judgments. How might section 174 apply?

A.Section 174 never applies to executive directors with functional titles

B.The higher subjective standard arising from the director's expertise could make inadequate review a breach

C.Reliance on external auditors removes any personal duty to review

D.Only non-executive directors owe a care and skill duty

Explanation: Experienced finance directors face a higher subjective threshold under section 174 because their actual expertise is taken into account. Approving accounts without reviewing significant judgments may fall below the care expected of someone with their background.

About the IoD Role of the Director & Board Exam

The IoD Role of the Director and the Board module is Stage One of the Chartered Director pathway (Certificate in Company Direction). It covers directors' legal duties and liabilities, the board's role in corporate governance and risk, the distinction between direction, management and ownership, board structure and effectiveness, and stakeholder accountability under UK company law and the UK Corporate Governance Code.

Assessment

Standalone modular Certificate exam: 16 multiple-choice questions (12 × 1 mark and 4 × 2 marks; 20 marks total), remotely invigilated. Successful completion awards the Award in Role of the Director and the Board (SCQF Level 9) and contributes to the Certificate in Company Direction when all four modular awards are passed.

Time Limit

45 minutes

Passing Score

Pass ≥50%; Distinction ≥75%. Results released as distinction / pass / fail (no numerical score).

Exam Fee

First-sit exam fee is typically included with the course booking. Standalone Certificate exams historically about £200 per module or £600 for all four; Certificate resits £175. IoD changed examination fees from 5 May 2026 — confirm current pricing on the IoD Examinations page. Course fee (separate): member from about £3,495 / non-member about £3,995 for the 2-day module (ex VAT; confirm on iod.com). (Institute of Directors (IoD))

IoD Role of the Director & Board Exam Content Outline

25%

Directors' Legal Duties & Liabilities

CA 2006 ss 171–177, s172 factors, shadow/de facto directors, conflicts, and liability/disqualification concepts.

20%

Corporate Governance Framework

UK Corporate Governance Code (comply or explain), Wates Principles, and governance purpose.

18%

Board Roles & Structure

Chair/CEO split, NEDs, SID, committees, and company secretary support.

12%

Direction, Management & Ownership

Separating board direction from management execution and shareholder ownership.

15%

Board Effectiveness

Information, induction, challenge, culture, and board evaluation.

10%

Risk Oversight & Stakeholders

Board risk oversight and stakeholder engagement under s172 and the Code.

How to Pass the IoD Role of the Director & Board Exam

What You Need to Know

Passing score: Pass ≥50%; Distinction ≥75%. Results released as distinction / pass / fail (no numerical score).
Assessment: Standalone modular Certificate exam: 16 multiple-choice questions (12 × 1 mark and 4 × 2 marks; 20 marks total), remotely invigilated. Successful completion awards the Award in Role of the Director and the Board (SCQF Level 9) and contributes to the Certificate in Company Direction when all four modular awards are passed.
Time limit: 45 minutes
Exam fee: First-sit exam fee is typically included with the course booking. Standalone Certificate exams historically about £200 per module or £600 for all four; Certificate resits £175. IoD changed examination fees from 5 May 2026 — confirm current pricing on the IoD Examinations page. Course fee (separate): member from about £3,495 / non-member about £3,995 for the 2-day module (ex VAT; confirm on iod.com).

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

IoD Role of the Director & Board Study Tips from Top Performers

1Memorise the seven CA 2006 general duties (ss 171–177) by name and typical board scenario, then practise applying the six s172(1) factors to decisions rather than only recalling the list.

2Drill the chair/CEO separation, NED challenge role, and audit/remuneration/nomination committee purposes against UK Corporate Governance Code principles — IoD scenario items often test role confusion.

3After the 2-day course, use IoD Academy exam preparation materials while content is fresh; IoD recommends sitting the modular exam within two years of course completion and ideally soon after revision.

Frequently Asked Questions

What is the IoD Role of the Director and the Board exam?

It is the modular Award exam for the first Certificate in Company Direction subject. You sit 16 multiple-choice questions in 45 minutes under remote invigilation. Passing contributes to the Certificate once you also pass the Finance, Strategy, and Leadership modular awards.

What is the pass mark?

IoD Certificate modular exams require at least 50% to pass and 75% or above for a distinction. Numerical scores are not released — results are distinction, pass, or fail.

How much does the exam cost?

The first exam attempt is usually included when you book the course. Standalone Certificate exam fees and resit fees are set by IoD and were updated from 5 May 2026; confirm the live fee on the IoD Examinations page before booking.

What topics should I revise?

Focus on Companies Act 2006 directors' duties (ss 171–177), the difference between direction, management and ownership, UK Corporate Governance Code board leadership and division of responsibilities, board effectiveness practices, and board-level risk and stakeholder oversight.