Exam 12: Corporate Governance and Business Ethics

Vijay is a firm believer in Milton Friedman's view of a firm's social obligations.With which of the following statements is Vijay most likely to agree?

The _____ is the centerpiece of corporate governance and is composed of inside and outside members.

_____ suggests that the firm can be viewed as a nexus of legal contracts (loosely defined)between resource holders.

Which of the following accurately describes GE's ecomagination initiative?

In publicly traded companies,individuals who are delegated to perform duties on behalf of company owners are known as

The informational advantage that agents possess over principals is often based on the fact that

Which of the following characteristics of a public stock company deals with principals and agents?

Which of the following best supports the fact that Goldman Sachs was unethical in the Abacus deal?

Jamiro Inc.is a public stock company.Which of the following statements about the company best illustrates the fact that its investors have limited liability?

A company scientist at a biotechnology company decides to work on his own research project,hoping to eventually start his own firm,rather than on the project he was assigned.However,the company's stockholders are unaware of this situation.This is an example of a(n)_____ in the context of a principle-agent problem.

Rajat Gupta's role in providing inside information to Galleon Group for the benefit of Galleon Group's stockholders and himself is an example of

Which of the following is the source of the principal-agent problem in publicly traded companies?

Kaito is the CEO of Henson and Fukui Consulting Inc.Kaito's efforts to persuade the board of directors to pursue a new business strategy fail.He borrows money from different sources and purchases all the outstanding shares of Henson and Fukui Consulting.What does this scenario best exemplify?

Creating economic value for shareholders while also creating social value is known as creating

The root cause of the principal-agent problem between senior executives and lower-level employees can be explained by the

Mario founded Tapoz Communications Inc.in 1993.Ten years later,the company went public.Despite Mario's death in 2005,the company reported a 75 percent increase in revenue in 2006.Which of the following characteristics of a publicly traded company does this scenario best exemplify?

What is the result of managers' pursuit of strategies that define value creation too narrowly in public stock companies?

Which of the following is an advantage that a private company enjoys over a public company?

All public companies listed on the U.S.stock exchanges must file a number of financial statements with the

John Hammergren,the CEO of McKesson,received an annual compensation of $50 million.The compensation was closely tied to the performance of McKesson's stock,which appreciated considerably during his tenure.This situation best exemplifies