Exam 13: Corporate Governance in the Twenty-First Century

Board interlock occurs when a director sits on multiple boards.

The two most common types of incentive compensation programs that reward executives and align the interests of top-management teams with those of shareholders are stock options and ________.

Ideal standards formulated by regulatory, market, and government institutions are called ________.

An individual who hires another to act on his/her behalf is referred to as a(n) ________.

Most institutional investors are active and aggressive investors.

Which of the following is not one of the essential components of the Sarbanes-Oxley Act?

Which of the following is not a compliance rule resulting from the Sarbanes-Oxley Act?

One of the fundamental conditions that leads to a potential agency problem in publicly held companies is the separation of firm ownership from ________.

All of the following countries' codes of governance recommend a split between the roles of CEO and chairperson except ________.

Two countries with a strong orientation toward shareholders' rights are the United States and the United Kingdom of Great Britain.

Managers must understand who owns the company and what their interests are.

When managers are owners of the firm, the risk that they will deviate from the organization's stated purpose increases.

Compare and contrast the roles of principal and agent in modern corporations.

The New York Stock Exchange requires that the audit committee of boards of directors be composed of ________.

All companies have a corporate governance system.

_____ is achieved by having sufficient power and votes to choose the CEO and members of the board of a company and control all major decisions.

The most far-reaching governance reforms in the U.S. in terms of legal requirements are contained in the ________.

Chinese public firms are controlled by state-owned or state-controlled shareholders.

The most direct way to align incentives is the use of the annual bonus plan.

The agency problem that can occur between managers and shareholders is sometimes solved by performing ________.