Question 1

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

Accepted Answer

A)  government. 
B)  executives. 
C)  shareholders. 
D)  customers. 
A)  government. 
B)  executives. 
C)  shareholders. 
D)  customers.

Question 2

Research suggests that the activism of institutional investors such as TIAA-CREF and CalPERS:

Accepted Answer

A)  increases shareholder value significantly. 
B)  may not have a direct effect on firm performance. 
C)  is so aggressive that Boards of Directors have become overly cautious. 
D)  has weakened the effect of other governance mechanisms. 
A)  increases shareholder value significantly. 
B)  may not have a direct effect on firm performance. 
C)  is so aggressive that Boards of Directors have become overly cautious. 
D)  has weakened the effect of other governance mechanisms.

Question 3

Scandals at Enron, WorldCom, and HealthSouth illustrate the negative effects of poor ethical behavior on a firm's efforts to satisfy stakeholders.

Accepted Answer

A) True 
 B)False

Question 4

The market for corporate control serves as a means of governance when:

Accepted Answer

A)  the firm is overpriced in the market. 
B)  internal controls have failed. 
C)  the corporation has greatly exceeded performance expectations. 
D)  the top management team's interests and the owners' interests are aligned. 
A)  the firm is overpriced in the market. 
B)  internal controls have failed. 
C)  the corporation has greatly exceeded performance expectations. 
D)  the top management team's interests and the owners' interests are aligned.

Question 5

Stock option repricing where the strike price value of the option has been lowered from its original position sometimes happens when firm performance is poor.

Accepted Answer

A) True 
 B)False

Question 6

Corporate governance is the set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of an organization.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is FALSE about corporate governance in China?

Accepted Answer

A)  The Chinese governance system may be tilting toward the Western model. 
B)  With increasing frequency, the compensation of top executives of Chinese companies is closely related to prior and current financial performance of the firm. 
C)  The state still uses direct and/or indirect controls to influence the strategies employed by most firms. 
D)  Firms with higher state ownership tend to have lower market value and more volatility in those values over time. 
A)  The Chinese governance system may be tilting toward the Western model. 
B)  With increasing frequency, the compensation of top executives of Chinese companies is closely related to prior and current financial performance of the firm. 
C)  The state still uses direct and/or indirect controls to influence the strategies employed by most firms. 
D)  Firms with higher state ownership tend to have lower market value and more volatility in those values over time.

Question 8

The New York Stock Exchange requires that the audit committee be:

Accepted Answer

A)  available to comment to external analysts. 
B)  headed by outside directors. 
C)  liable for any illegal actions by the top management team. 
D)  made up of CPAs with auditing experience. 
A)  available to comment to external analysts. 
B)  headed by outside directors. 
C)  liable for any illegal actions by the top management team. 
D)  made up of CPAs with auditing experience.

Question 9

Individual shareholders with small ownership percentages are less dependent on the Board of Directors to represent their interests than are large block shareholders.

Accepted Answer

A) True 
 B)False

Question 10

Corporate governance revolves around the relationship between which two parties?

Accepted Answer

A)  Shareholders and the Board of Directors 
B)  Shareholders and managers 
C)  The Board of Directors and managers 
D)  None of the the above 
A)  Shareholders and the Board of Directors 
B)  Shareholders and managers 
C)  The Board of Directors and managers 
D)  None of the the above

Question 11

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

Accepted Answer

A)  firms with unethical top executives 
B)  firms earning above-average returns 
C)  poorly performing firms 
D)  over-valued firms 
A)  firms with unethical top executives 
B)  firms earning above-average returns 
C)  poorly performing firms 
D)  over-valued firms

Question 12

Research suggests that Boards of Directors perform better if:

Accepted Answer

A)  the CEO is also the chairperson of the Board of Directors. 
B)  the Bard includes employees as voting members. 
C)  the Board is homogenous in composition. 
D)  outside directors own significant equity in the organization. 
A)  the CEO is also the chairperson of the Board of Directors. 
B)  the Bard includes employees as voting members. 
C)  the Board is homogenous in composition. 
D)  outside directors own significant equity in the organization.

Question 13

What is corporate governance and how is it used to monitor and control managers' decisions?

Accepted Answer

Corporate governance is the relationship

Question 14

Executive compensation is considered an external corporate governance mechanism because it determined in part by market forces.

Accepted Answer

A) True 
 B)False

Question 15

Institutional owners are:

Accepted Answer

A)  shareholders in the large institutional firms listed on the New York Stock Exchange. 
B)  banks and other lending institutions that have provided major financing to the firm. 
C)  financial institutions such as mutual funds and pension funds that control large-block shareholder positions. 
D)  prevented by the Sarbanes-Oxley Act from owning more than 50 percent of the stock of any one firm. 
A)  shareholders in the large institutional firms listed on the New York Stock Exchange. 
B)  banks and other lending institutions that have provided major financing to the firm. 
C)  financial institutions such as mutual funds and pension funds that control large-block shareholder positions. 
D)  prevented by the Sarbanes-Oxley Act from owning more than 50 percent of the stock of any one firm.

Question 16

A powerful CEO would oppose the appointment of a lead director on the Board of Directors.

Accepted Answer

A) True 
 B)False

Question 17

James Abercrombie has a thriving consulting firm specializing in training Boards of Directors in decision-making skills. Mr. Abercrombie has had striking success in reducing conflict and hostility among directors and allowing Boards to develop more cohesiveness. Mr. Abercrombie is considering expanding his consulting practice overseas. Which of the following statements is most likely to be TRUE?

Accepted Answer

A)  Mr. Abercrombie will have a large market in Japan because the culture highly values consensus decision making. 
B)  Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. 
C)  German firms will not be interested in Mr. Abercrombie's services because the German system of decision making is based on authority and few conflicts emerge. 
D)  Mr. Abercrombie should find significant need for his services in companies in transitional economies. 
A)  Mr. Abercrombie will have a large market in Japan because the culture highly values consensus decision making. 
B)  Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. 
C)  German firms will not be interested in Mr. Abercrombie's services because the German system of decision making is based on authority and few conflicts emerge. 
D)  Mr. Abercrombie should find significant need for his services in companies in transitional economies.

Question 18

While the implementation of the Sarbanes-Oxley Act in 2002 has been controversial to some, most believe that it has had positive results in terms of protecting stakeholders and certain stockholder interests.

Accepted Answer

A) True 
 B)False

Question 19

German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the UK and United States largely because:

Accepted Answer

A)  the roles of CEO and chairperson of the Board of Directors are usually combined. 
B)  large institutional investors control large blocks of stock. 
C)  private shareholders and large institutional investors rarely have large ownership positions in firms. 
D)  of the focus on stewardship-management in German firms rather than the financial performance focus of U.S. firms. 
A)  the roles of CEO and chairperson of the Board of Directors are usually combined. 
B)  large institutional investors control large blocks of stock. 
C)  private shareholders and large institutional investors rarely have large ownership positions in firms. 
D)  of the focus on stewardship-management in German firms rather than the financial performance focus of U.S. firms.

Question 20

Foreign investors are playing a relatively minor role in the governance of firms in many countries.

Accepted Answer

A) True 
 B)False

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

Research suggests that the activism of institutional investors such as TIAA-CREF and CalPERS:

Scandals at Enron, WorldCom, and HealthSouth illustrate the negative effects of poor ethical behavior on a firm's efforts to satisfy stakeholders.

The market for corporate control serves as a means of governance when:

Stock option repricing where the strike price value of the option has been lowered from its original position sometimes happens when firm performance is poor.

Corporate governance is the set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of an organization.

Which of the following is FALSE about corporate governance in China?

The New York Stock Exchange requires that the audit committee be:

Individual shareholders with small ownership percentages are less dependent on the Board of Directors to represent their interests than are large block shareholders.

Corporate governance revolves around the relationship between which two parties?

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:

What is corporate governance and how is it used to monitor and control managers' decisions?

Executive compensation is considered an external corporate governance mechanism because it determined in part by market forces.

Institutional owners are:

A powerful CEO would oppose the appointment of a lead director on the Board of Directors.

While the implementation of the Sarbanes-Oxley Act in 2002 has been controversial to some, most believe that it has had positive results in terms of protecting stakeholders and certain stockholder interests.

German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the UK and United States largely because:

Foreign investors are playing a relatively minor role in the governance of firms in many countries.

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Business-Level Strategy

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

Merger and Acquisition Strategies

International Strategy

Cooperative Strategy

Organizational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

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Exam 10: Corporate Governance

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

Research suggests that the activism of institutional investors such as TIAA-CREF and CalPERS:

Scandals at Enron, WorldCom, and HealthSouth illustrate the negative effects of poor ethical behavior on a firm's efforts to satisfy stakeholders.

The market for corporate control serves as a means of governance when:

Stock option repricing where the strike price value of the option has been lowered from its original position sometimes happens when firm performance is poor.

Corporate governance is the set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of an organization.

Which of the following is FALSE about corporate governance in China?

The New York Stock Exchange requires that the audit committee be:

Individual shareholders with small ownership percentages are less dependent on the Board of Directors to represent their interests than are large block shareholders.

Corporate governance revolves around the relationship between which two parties?

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:

What is corporate governance and how is it used to monitor and control managers' decisions?

Executive compensation is considered an external corporate governance mechanism because it determined in part by market forces.

Institutional owners are:

A powerful CEO would oppose the appointment of a lead director on the Board of Directors.

While the implementation of the Sarbanes-Oxley Act in 2002 has been controversial to some, most believe that it has had positive results in terms of protecting stakeholders and certain stockholder interests.

German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the UK and United States largely because:

Foreign investors are playing a relatively minor role in the governance of firms in many countries.

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Business-Level Strategy

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

Merger and Acquisition Strategies

International Strategy

Cooperative Strategy

Organizational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters