Question 1

What is the primary problem inherent in management control of the finn?

Accepted Answer

The main problem with management control is that power is concentrated in the hands of the very group that stands to benefit the most from that power.Managers' interests are closely tied to the finn--their livelihood,potential wealth,and status all emanate from the company.This is the seed of the agency problem.Instead of running the company for the primary benefit of the owners,as managers' fiduciary duties demand,the managers tend to start operating the business for their personal interests

Question 2

Should directors be held personally liable in cases of corporate misconduct?

Accepted Answer

A firm answer to this question would obviously depend on the specific circumstances involved,but in a general sense,the answer is yes.Yes,they should at least be subject to personal liability if the facts warrant it.Board members,by acceptance of their positions,accept a fiduciary responsibility to the firm's shareholders.They also accept certain levels of duty toward other stakeholders.If directors fail to meet those duties out of "gross negligence" they should be held personally accountable.

Question 3

In the grand scheme of things,the interests of the investing public are more important than those of the management team.

Accepted Answer

A) True 
 B)False  True

Question 4

Shareholders' control is manifested primarily in the right to select the CEO of the company.

Accepted Answer

A) True 
 B)False

Question 5

The board's compensation committee has responsibility for

Accepted Answer

A) setting directors' pay scales. 
B) making sure that all employees are paid a fair wage. 
C) evaluating executive performance and recommending terms and conditions of employment. 
D) determining what bonuses should be paid and to whom. 
A) setting directors' pay scales. 
B) making sure that all employees are paid a fair wage. 
C) evaluating executive performance and recommending terms and conditions of employment. 
D) determining what bonuses should be paid and to whom.

Question 6

The micro level of legitimacy refers to achieving and maintaining legitimacy by conforming to societal expectations for

Accepted Answer

A) the business system as a whole. 
B) public policy partnerships. 
C) non-government organizations. 
D) individual businesses. 
A) the business system as a whole. 
B) public policy partnerships. 
C) non-government organizations. 
D) individual businesses.

Question 7

Companies that elected to provide meaningful information to shareholders and securities professionals without also informing small investors were practicing

Accepted Answer

A) insider trading. 
B) programmed trading. 
C) selective disclosure. 
D) stair-stepping. 
A) insider trading. 
B) programmed trading. 
C) selective disclosure. 
D) stair-stepping.

Question 8

The primary purpose of the Sarbanes-Oxley Act is to

Accepted Answer

A) provide rules regulating the relationship between CEOs and boards. 
B) limit the power of corporate boards. 
C) restrict the flow of corporate money into politics. 
D) provide better protection for investors in public companies by improving the financial reporting of those companies. 
A) provide rules regulating the relationship between CEOs and boards. 
B) limit the power of corporate boards. 
C) restrict the flow of corporate money into politics. 
D) provide better protection for investors in public companies by improving the financial reporting of those companies.

Question 9

There is some early evidence that the Sarbanes-Oxley Act has made little difference in the attention fmancial executives pay to shareholder reports.

Accepted Answer

A) True 
 B)False

Question 10

Describe how the separation of ownership and control carne about.

Accepted Answer

One of the key elements in this process

Question 11

Boards have recently improved in all of the following ways except

Accepted Answer

A) more directors are independent. 
B) reducing executive pay. 
C) more directors own stock in the company. 
D) more boards are likely to demand change. 
A) more directors are independent. 
B) reducing executive pay. 
C) more directors own stock in the company. 
D) more boards are likely to demand change.

Question 12

During the past forty years,corporate boards have become more diverse.

Accepted Answer

A) True 
 B)False

Question 13

Personal liability for a corporate board member means that

Accepted Answer

A) directors have a legal obligation to pay all debts of the corporation. 
B) directors have a legal obligation to pay all debts of the corporation if the company cannot. 
C) directors may be sued for breach of fiduciary duty. 
D) directors have a personal responsibility to the shareholders. 
A) directors have a legal obligation to pay all debts of the corporation. 
B) directors have a legal obligation to pay all debts of the corporation if the company cannot. 
C) directors may be sued for breach of fiduciary duty. 
D) directors have a personal responsibility to the shareholders.

Question 14

Forecast how society would change if business did lose its macro level oflegitimacy.

Accepted Answer

Students are likely

Question 15

Which of the following is not on the ranking of red flags that signal board problems?

Accepted Answer

A) Company has to restate earnings 
B) Poor employee morale 
C) Poor customer satisfaction track record 
D) Stock price increases 
A) Company has to restate earnings 
B) Poor employee morale 
C) Poor customer satisfaction track record 
D) Stock price increases

Question 16

What are the two main issues associated with CEO pay?

Accepted Answer

The main issue associated with CEO pay,t

Question 17

Audit committees arguably have the most responsibility of all board committees.

Accepted Answer

A) True 
 B)False

Question 18

The group that is elected by shareholders to govern and oversee management is the

Accepted Answer

A) investment council. 
B) board of directors. 
C) board of trustees. 
D) governing council. 
A) investment council. 
B) board of directors. 
C) board of trustees. 
D) governing council.

Question 19

Although initially,companies did not object to the compliance costs of Sarbanes-Oxley,after 10 years experience with the law,they now object strenuously

Accepted Answer

A) True 
 B)False

Question 20

What is the difference between an owner and an investor?

Accepted Answer

An owner,in the true sense of the word,h

What is the primary problem inherent in management control of the finn?

Should directors be held personally liable in cases of corporate misconduct?

In the grand scheme of things,the interests of the investing public are more important than those of the management team.

Shareholders' control is manifested primarily in the right to select the CEO of the company.

The board's compensation committee has responsibility for

The micro level of legitimacy refers to achieving and maintaining legitimacy by conforming to societal expectations for

Companies that elected to provide meaningful information to shareholders and securities professionals without also informing small investors were practicing

The primary purpose of the Sarbanes-Oxley Act is to

There is some early evidence that the Sarbanes-Oxley Act has made little difference in the attention fmancial executives pay to shareholder reports.

Describe how the separation of ownership and control carne about.

Boards have recently improved in all of the following ways except

During the past forty years,corporate boards have become more diverse.

Personal liability for a corporate board member means that

Forecast how society would change if business did lose its macro level oflegitimacy.

Which of the following is not on the ranking of red flags that signal board problems?

What are the two main issues associated with CEO pay?

Audit committees arguably have the most responsibility of all board committees.

The group that is elected by shareholders to govern and oversee management is the

Although initially,companies did not object to the compliance costs of Sarbanes-Oxley,after 10 years experience with the law,they now object strenuously

What is the difference between an owner and an investor?

The Business and Society Relationship

Orporate Citi7cnship: Social Responsibility Ferformancc, Sustolinability

The Stoikt:holdc:r Approach to Businssotit:l, and Elhics

Strategic F Anagen1ent and Corpor3te Public Policy

Lss-Ue, Risk, and Crisis Tanage1ucnt

Busi Ness Ethics Fundamentals

Personal Aud Organizational Ethics

Business Ethics and Technology

Ethical Issues in the Global Arena

Business, Go,crnmcnl, and Rcgulation

Business Influence on Gocrnment and Public Policy

Consun1er Stakeholders:information Issues and Responses

Consu1ner Stakeholders:product and Service Lssues

Sustolinability and the Naturnl Enironmenl

Buiiinc11s Iand Community Stakcholdn1

Employee Stolkeholders and Vorkplace Jssud

Employtt Stnkcholdcr11: Privacy, Safcty, and Tlcalth

E1nploy 1ncnt Discrhnination and Affir1native Action

Filters

Exam 4: Corporate Governance: Founda Tion31 Luet

What is the primary problem inherent in management control of the finn?

Should directors be held personally liable in cases of corporate misconduct?

In the grand scheme of things,the interests of the investing public are more important than those of the management team.

Shareholders' control is manifested primarily in the right to select the CEO of the company.

The board's compensation committee has responsibility for

The micro level of legitimacy refers to achieving and maintaining legitimacy by conforming to societal expectations for

Companies that elected to provide meaningful information to shareholders and securities professionals without also informing small investors were practicing

The primary purpose of the Sarbanes-Oxley Act is to

There is some early evidence that the Sarbanes-Oxley Act has made little difference in the attention fmancial executives pay to shareholder reports.

Describe how the separation of ownership and control carne about.

Boards have recently improved in all of the following ways except

During the past forty years,corporate boards have become more diverse.

Personal liability for a corporate board member means that

Forecast how society would change if business did lose its macro level oflegitimacy.

Which of the following is not on the ranking of red flags that signal board problems?

What are the two main issues associated with CEO pay?

Audit committees arguably have the most responsibility of all board committees.

The group that is elected by shareholders to govern and oversee management is the

Although initially,companies did not object to the compliance costs of Sarbanes-Oxley,after 10 years experience with the law,they now object strenuously

What is the difference between an owner and an investor?

The Business and Society Relationship

Orporate Citi7cnship: Social Responsibility Ferformancc, Sustolinability

The Stoikt:holdc:r Approach to Businssotit:l, and Elhics

Strategic F Anagen1ent and Corpor3te Public Policy

Lss-Ue, Risk, and Crisis Tanage1ucnt

Busi Ness Ethics Fundamentals

Personal Aud Organizational Ethics

Business Ethics and Technology

Ethical Issues in the Global Arena

Business, Go,crnmcnl, and Rcgulation

Business Influence on Gocrnment and Public Policy

Consun1er Stakeholders:information Issues and Responses

Consu1ner Stakeholders:product and Service Lssues

Sustolinability and the Naturnl Enironmenl

Buiiinc11s Iand Community Stakcholdn1

Employee Stolkeholders and Vorkplace Jssud

Employtt Stnkcholdcr11: Privacy, Safcty, and Tlcalth

E1nploy 1ncnt Discrhnination and Affir1native Action

Filters