Exam 13: Corporate Governance in the Twenty-First Century

Effective governance will always prevent executive fraud.

Which of the following is not one of the agency control mechanisms commonly seen in all governance guidelines?

_____ are sometimes used to alleviate problems caused by potential conflicts of interest between shareholders and CEOs.

When the interests of principals and agents are in alignment, the agency problem is small.

All of the following are advantages of bonus-plan incentives except ________.

What is corporate governance?

All of the following are part of a board of directors' monitoring function except ________.

Incentives may exacerbate conflicts of interest.

Sometimes corporate governance characteristics are stronger predictors of firm valuation than such things as sales or profits.

After going public, the founders of an IPO firm generally find that all except ________ happens.

Corporate governance has little impact on a firm's ability to create a competitive advantage.

In the U.S., the roles of CEO and board chair are ________.

A key strategy for shareholders is to align the interests of executives with their own, or closely monitor and control what executives do.

All of the following are routine monitoring mechanisms for boards except ________.

When professional managers, rather than the owners of a firm, run the firm's operations, situations can arise in which there may be ________.

Some things that would be in shareholders' best interests may be detrimental to the best interests of executives, and vice versa.

A group of individuals that formally represent the firm's shareholders and oversee the work of executives are referred to as ________.

Landing highly paid CEOs as directors will probably lead to a board that will be supportive of ________.

Which of the following statements is not true concerning the relationship between corporate governance and strategy?

What is the function of the Public Company Accounting Oversight Board?