Exam 10: Corporate Governance

The top management of RavenCrest, Inc.has significant stock options in RavenCrest.They are therefore more likely to gain in making an agreement to be acquired, especially if they have golden parachutes.

Recent global emphasis on corporate governance stems mainly from the apparent failure of corporate governance mechanisms to adequately monitor and control top-level managers' decisions.

Amelia Smith is the sole owner of the successful restaurant chain, Amelia's Café.Ms.Smith has taken a no-interest loan from the company in order to build a luxurious seaside house for herself in Carmel, California.This constitutes a classic agency problem.

The use of executive compensation as a governance mechanism is more challenging to firms implementing international strategies than those strictly operating domestically.

Ownership concentration is determined by both the number of:

Institutional owners are:

In Japan, the principal source of the active monitoring of large companies comes from:

The primary role of the board of directors is to monitor and control top-level executives to protect owners' interests.

If the market for corporate control were efficient as a governance device, then only __________ would be targets for takeovers.

Research suggests that boards of directors perform better if:

Which of the following statements about corporate governance in Germany is false?

Large German firms must include employees, union members, and shareholders in the formal governance structure.

Which of the following statements about corporate governance in China is false?

The CEO and chairman of the board of directors of Alta Corp.is dismayed by a lack of effort and insights the members provide during board meetings.The directors are all outsiders, are experienced, and run their own successful firms.The CEO/chair genuinely seeks their greater involvement.Which of the following would you recommend?

In the United States, the fundamental goal of business is to:

In the United States, a firm's key stakeholder(s) is(are) the:

Usually, large-block shareholders are considered to be those shareholders with at least __________ percent of the firm's stock.

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions related to consumer protection, systemic risk oversight, and capital requirements for banks, but not for executive compensation.

Severance packages are generally opposed, partly because they have a low level of success as a defense strategy.However, those who want to encourage top-level managers to accept a takeover bid that will best serve shareholders' interest would tend to favor this option.

Ethically responsible companies design and use governance mechanisms that will at least minimally satisfy stakeholders' interests.