Exam 37: Corporate Governance and the Sarbanes-Oxley Act

The buy-and-sell agreement allows shareholders to sell their shares to people other than fellow shareholders or the corporation.

According to the provisions set forth by the Sarbanes-Oxley Act, the ________, a federal government agency, may issue an order prohibiting any person who has committed securities fraud from acting as an officer or a director of a public company.

A shareholder's authorization of another person to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is called a(n)________.

________ are employees of a corporation who are appointed by the board of directors to manage the day-to-day operations of the corporation.

The written document submitted by a person who has been authorized by a shareholder to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is known as ________.

Helen works as the vice-president of Gotspeed Corporation, a company that develops and sells sports shoes.Nestor, a private cobbler, makes a new model of shoes that help a user's feet grip the shoe better, and he calls it the Anklator.Nestor's friend fixes an appointment for him with Helen to present his shoe model for possible adoption by Gotspeed.Instead of bringing the opportunity to Gotspeed's board of directors and the corporation, Helen pays Nestor's asking price and purchases the Anklator model for herself.Helen leaves Gotspeed Corporation and forms her own company that manufactures and markets the Anklator shoe models.What breach of the duty of loyalty has Helen committed here?

An arrangement in which the shareholders transfer their stock certificates to a trustee who is empowered to vote the shares is known as ________.

A ________ is an agreement that requires a selling shareholder to offer his or her shares for sale to the other parties to the agreement before selling them to anyone else.

Bilkis Brans has 20, 000 outstanding shares with four shareholders.Ester owns 9, 000 shares, Mendez owns 4, 000 shares, Judy owns 4, 000 shares, and Aaron owns 3000 shares.Suppose that two directors of the corporation are to be elected from a potential pool of 5 candidates.Ester is in favor of Candidates 1 and 5; Mendez in favor of Candidates 2 and 4; Judy in favor of Candidates 4 and 3; and Aaron in favor of Candidates 2 and 3.If the voting was done by straight voting, which of the two candidates are likely to win?

A system in which a shareholder can accumulate all of his or her votes and vote them all for one candidate or split them among several candidates is known as ________.

If a shareholder does not exercise his or her preemptive rights within the stated time, shares can then be sold to anyone.

According to the RMBCA, what establishes a quorum to hold a meeting of the shareholders?

A derivative lawsuit is brought by the board of directors on behalf of the corporation.

A corporation is bound to an unauthorized act committed by its corporate officer.

The ________ Act of 2002 is a federal statute enacted by Congress to improve corporate governance.

Shareholders of a corporation act as agents of the corporation.

The Sarbanes-Oxley Act applies only to public companies.

What is the supramajority voting requirement for shareholders?

The board of director's right to inspection can be limited by bylaws.

The duty of loyalty requires directors and officers to subordinate their personal interests to those of the corporation and its shareholders.