Chat with AIExam 2: Quality Assessment
Why is the combined Chair/CEO (or Managing Director) position being increasingly criticized by most management scholars?
(24) 
VerifiedIt has been observed in many studies on management that boards of directors tend to be more effective when an individual does not simultaneously occupy the positions of Chief Executive Officer (CEO) and chairperson. Such a situation, wherein a CEO is also the chairperson of the governing board, is referred to as CEO duality. A chairperson of a governing board may not necessarily be the leader of the board; in certain instances, the chairperson simply conducts the meetings of the board and sets the tone of the board. Their strength as a leader may well determine the effectiveness of the board. The separation of the position of chairperson of a governing board from the CEO position can significantly help directors prevent crises, act swiftly and effectively in the event of a crisis, and objectively evaluate the impact of crises. CEO duality usually has an adverse effect on organizational performance. For example, it has been observed that the bankruptcy rate tends to be positively correlated with CEO duality.
How should a board of directors be involved in the executive leadership of an organization?
(30) VerifiedA board of directors can actively play the executive leading role of its organization. A governing board is mainly responsible for the setting of strategies, and in many cases, it is able to influence numerous strategy-related decisions. The role of a board of directors is to be actively involved in guiding the management to achieve the corporate mission and corporate objectives. The existence of an active and participative board will make the management analyze and articulate their plans, proposals and suggestions in greater depth by generating high quality discussions on submissions for decisions.
What would be the impact if the only insider on a corporation's board were the CEO?
(30) VerifiedOne result would be a board composed primarily of outsiders who would be objective, but also dependent upon the CEO for information about the company and its activities. Thanks to Sarbanes-Oxley and other actions by the New York Stock Exchange, this appears to be a trend in most U.S. Fortune 500 companies. As of 2007, the typical U.S. Fortune 500 board had an average of ten directors, only two of whom being insiders. The number of insiders tends to be higher for boards in other countries. Even when a CEO might be the sole insider on the board, he/she still has a great deal of influence because the CEO usually also serves as the Chairman of the Board. Nevertheless, an increasing number of boards are selecting a "lead director" to oversee the evaluation of top management, so this can counter the dual CEO/Chair's power. A positive result of the CEO being the only insider on a board is that the board would be more likely to be objective and serious about its responsibility to oversee the corporation's management. A negative result would be the lessened opportunity to view potential successors in action or to obtain alternate points of view to management decisions.
Is there a conflict between agency theory and the concept of organizational stakeholders?
(30) Is there a close relationship between the composition of a board of directors and the organizational performance?
(34) What recommendations would you make to improve the effectiveness of today's boards of directors?
(39) What are the roles and responsibilities of an effective and active board of directors?
(37) 
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