Exam 11: Corporate Performance, Governance, and Business Ethics

When corporate CEOs and top managers use their power and control over funds to satisfy their personal desires for wealth or status,this is called

When managers of a firm seek to unilaterally rewrite the terms of a contract with suppliers,buyers,or complement providers in a way that is more favorable to their firm,they are engaging in

A takeover constraint

Institutional investors are becoming more aggressive in exerting their power with the board by

To make sure that ethical issues are considered in business decisions,

External stakeholders of a company include

Maximizing long-run profitability and profit growth is the best way to satisfy the claims of several key stakeholder groups irrespective to how the company does so.

Ethical decisions are those that are made in accordance with accepted principles of right and wrong.

Governance mechanisms help align the incentives between principals and agents and help monitor and control agents.

Pursuing strategies that maximize the long-run profitability and profit growth of a company benefits which group(s)of stakeholders?

Stock-based compensation schemes for senior executives are designed to align the interests of managers with those of stockholders.

The relationship between an enterprise and its stakeholders is essentially what type of relationship?

Which of the following is not a criticism of boards?

Business ethics is concerned with

Which of the following stakeholders might not want a company to maximize its long-run profitability and profit growth?

Through stock ownership plans,stockholders receive employee benefits.

Confronted with agency problems,which of the following is(are)challenge(s)for principals?

While they do a good job of increasing employee satisfaction,positive incentive systems do little to maximize long-run profitability.

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

The term information asymmetry describes the difference in personal ethics that agents and principals have.