Question 1

With stock ownership, executives are risking their own human capital.

Accepted Answer

A) True 
 B)False  True

Question 2

What is the role of the board of directors in corporate governance?

Accepted Answer

One of the chief monitoring devices available to shareholders is the board of directors. All publicly held companies are required to have a board of directors. A board of directors is charged with overseeing the work of top executives. The legal roles of the board include hiring and firing top executives, monitoring management, ensuring that shareholders' interests are protected, establishing executive compensation, and reviewing and approving the firm's strategy. Informal roles played by boards include acting as conduits of information from external sources, providing leads for acquisition and alliance-partner candidates, influencing important external parties such as industry regulators and foreign government policy makers, and providing advice and counsel for the CEO and other top executives.
The general responsibility of the board of directors is to ensure that executives are acting in the shareholders' best interests.

Question 3

Firms establish stock ownership policies in an attempt to ensure that executives act in the best interests of the shareholders.

Accepted Answer

A) True 
 B)False  True

Question 4

Some codes of conduct require managers to either comply with the standards or explain why they have not complied.

Accepted Answer

A) True 
 B)False

Question 5

When bonuses are tied to accounting indicators of performance, executives may be motivated to alter year-end income deferrals.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is not true concerning corporate governance?

Accepted Answer

A)  Corporate governance is present only in public organizations. 
B)  Corporate governance provides rules for making decisions on corporate affairs. 
C)  Corporate governance provides a structure for monitoring performance. 
D)  Corporate governance seeks to benefit multiple stakeholders and not just shareholders. 
A)  Corporate governance is present only in public organizations. 
B)  Corporate governance provides rules for making decisions on corporate affairs. 
C)  Corporate governance provides a structure for monitoring performance. 
D)  Corporate governance seeks to benefit multiple stakeholders and not just shareholders.

Question 7

Owners and workers typically sit on the boards of directors in which of the following countries?

Accepted Answer

A)  France 
B)  Germany 
C)  China 
D)  all of the above 
A)  France 
B)  Germany 
C)  China 
D)  all of the above

Question 8

Executives with large proportions of their pay package derived from stock options tend to pursue aggressive ________ strategies.

Accepted Answer

A)  local expansion and globalization 
B)  consolidation and restructuring 
C)  acquisition and divestiture 
D)  managerial and employee relations 
A)  local expansion and globalization 
B)  consolidation and restructuring 
C)  acquisition and divestiture 
D)  managerial and employee relations

Question 9

_____ is the process of the board acting in its legal responsibility to oversee executives' behaviors and performance.

Accepted Answer

A)  Advising 
B)  Advocating 
C)  Consulting 
D)  Monitoring 
A)  Advising 
B)  Advocating 
C)  Consulting 
D)  Monitoring

Question 10

A special kind of incentive designed to tie executives' financial rewards to shareholder value while avoiding risk is referred to as a(n) ________.

Accepted Answer

A)  stock option 
B)  bonus plan 
C)  restricted stock grant 
D)  limited stock option 
A)  stock option 
B)  bonus plan 
C)  restricted stock grant 
D)  limited stock option

Question 11

The United Kingdom Commission was formed to clarify the respective responsibilities and obligations of relevant entities connected to a firm.

Accepted Answer

A) True 
 B)False

Question 12

Even when ownership is dispersed, some shareholders still are in a position to influence corporate policies.

Accepted Answer

A) True 
 B)False

Question 13

The definition of public firm versus private firm is consistent across all parts of the world.

Accepted Answer

A) True 
 B)False

Question 14

In most situations, the interests of principals and agents naturally overlap completely.

Accepted Answer

A) True 
 B)False

Question 15

Outsiders are typically more independent but may lack critical knowledge.

Accepted Answer

A) True 
 B)False

Question 16

Executives of the firm who also serve on the board are often referred to as "insiders."

Accepted Answer

A) True 
 B)False

Question 17

The Cadbury Code is a model of governance developed specifically for the candy-making industry.

Accepted Answer

A) True 
 B)False

Question 18

The Cadbury Commission was established to help raise corporate governance standards and increase the level of confidence in financial reporting and auditing.

Accepted Answer

A) True 
 B)False

Question 19

Shareholders have very little direct control over what happens with a firm.

Accepted Answer

A) True 
 B)False

Question 20

A new stock exchange designed to be a separate market for small and midsize companies that follows strict governance prescriptions was launched in Italy.

Accepted Answer

A) True 
 B)False

With stock ownership, executives are risking their own human capital.

What is the role of the board of directors in corporate governance?

Firms establish stock ownership policies in an attempt to ensure that executives act in the best interests of the shareholders.

Some codes of conduct require managers to either comply with the standards or explain why they have not complied.

When bonuses are tied to accounting indicators of performance, executives may be motivated to alter year-end income deferrals.

Which of the following statements is not true concerning corporate governance?

Owners and workers typically sit on the boards of directors in which of the following countries?

Executives with large proportions of their pay package derived from stock options tend to pursue aggressive ________ strategies.

_____ is the process of the board acting in its legal responsibility to oversee executives' behaviors and performance.

A special kind of incentive designed to tie executives' financial rewards to shareholder value while avoiding risk is referred to as a(n) ________.

The United Kingdom Commission was formed to clarify the respective responsibilities and obligations of relevant entities connected to a firm.

Even when ownership is dispersed, some shareholders still are in a position to influence corporate policies.

The definition of public firm versus private firm is consistent across all parts of the world.

In most situations, the interests of principals and agents naturally overlap completely.

Outsiders are typically more independent but may lack critical knowledge.

Executives of the firm who also serve on the board are often referred to as "insiders."

The Cadbury Code is a model of governance developed specifically for the candy-making industry.

The Cadbury Commission was established to help raise corporate governance standards and increase the level of confidence in financial reporting and auditing.

Shareholders have very little direct control over what happens with a firm.

A new stock exchange designed to be a separate market for small and midsize companies that follows strict governance prescriptions was launched in Italy.

Introducing Strategic Management

Leading Strategically Through Effective Vision and Mission

Examining the Internal Environment: Resources

Exploring the External Environment: Macro Industry and Dynamics

Creating Business Strategies

Crafting Business Strategy of Dynamic Contexts

Developing Corporate Strategy

Looking at International Strategies

Understanding Alliances and Cooperative Strategies

Studying Merges and Acquisitions

Organizational Structure, Systems, and Processes

Considering New Ventures and Corporate Renewal

Filters

Exam 13: Corporate Governance in the Twenty-First Century

With stock ownership, executives are risking their own human capital.

What is the role of the board of directors in corporate governance?

Firms establish stock ownership policies in an attempt to ensure that executives act in the best interests of the shareholders.

Some codes of conduct require managers to either comply with the standards or explain why they have not complied.

When bonuses are tied to accounting indicators of performance, executives may be motivated to alter year-end income deferrals.

Which of the following statements is not true concerning corporate governance?

Owners and workers typically sit on the boards of directors in which of the following countries?

Executives with large proportions of their pay package derived from stock options tend to pursue aggressive ________ strategies.

_____ is the process of the board acting in its legal responsibility to oversee executives' behaviors and performance.

A special kind of incentive designed to tie executives' financial rewards to shareholder value while avoiding risk is referred to as a(n) ________.

The United Kingdom Commission was formed to clarify the respective responsibilities and obligations of relevant entities connected to a firm.

Even when ownership is dispersed, some shareholders still are in a position to influence corporate policies.

The definition of public firm versus private firm is consistent across all parts of the world.

In most situations, the interests of principals and agents naturally overlap completely.

Outsiders are typically more independent but may lack critical knowledge.

Executives of the firm who also serve on the board are often referred to as "insiders."

The Cadbury Code is a model of governance developed specifically for the candy-making industry.

The Cadbury Commission was established to help raise corporate governance standards and increase the level of confidence in financial reporting and auditing.

Shareholders have very little direct control over what happens with a firm.

A new stock exchange designed to be a separate market for small and midsize companies that follows strict governance prescriptions was launched in Italy.

Introducing Strategic Management

Leading Strategically Through Effective Vision and Mission

Examining the Internal Environment: Resources

Exploring the External Environment: Macro Industry and Dynamics

Creating Business Strategies

Crafting Business Strategy of Dynamic Contexts

Developing Corporate Strategy

Looking at International Strategies

Understanding Alliances and Cooperative Strategies

Studying Merges and Acquisitions

Organizational Structure, Systems, and Processes

Considering New Ventures and Corporate Renewal

Filters