Deck 5: Ethical Leadership and Corporate Governance

Question 1

______________ should view themselves as active owners of the firm, not just investors.

A) Board of directors
B) Institutional shareholders
C) Senior management
D) Employees

Answer 1

B

Question 2

A(n) _______________ leader is one who is focused on developing a long-term vision for the company and who uses a charismatic personality to communicate his or her vision to the employees.

A) Transactional
B) Transformational
C) Rational
D) Committed

Answer 2

B

Question 3

The _______________ of ethical power refers to the leader establishing a long term vision for the organization.

A) Purpose
B) Perspective
C) Persistence
D) Patience

Answer 3

A

Question 4

Board members can be classified as either _______________.

A) Related or unrelated
B) Inside or outside
C) Tactical or operational
D) Financial or nonfinancial

Question 5

__________ transformational leaders use power to manipulate others and focus on their own self interests.

A) Authentic
B) Effective
C) Pseudo
D) Ethical

Question 6

Martha Stewart could be an example of a(n) _______________ leader in that her media empire was built on the correct way to entertain and interact with other people, but her conviction may cause other employees within her empire to question whether any of her statements after her convictions were true.

A) Unethical
B) Ethical
C) Hypocritical
D) Inconsistent

Question 7

A(n) ______________ leader is a very dangerous position for a manager to establish with other employees within the firm because this leader would have destroyed all three critical traits of a moral person.

A) Unethical
B) Ethical
C) Hypocritical
D) Inconsistent

Question 8

Which of the following is NOT a type of board involvement as proposed by David Nadler?

A) Passive
B) Engaged c Interfering
D) Operating

Question 9

A(n) ____________ board member is a person who has direct financial ties to the firm.

A) Related
B) Outside
C) Inside
D) Operational

Question 10

A(n) ______________ leader is a manager who has strong ethical traits, behaviors, and decision making of a moral person but is not able to transfer those values to other employees within the firm.

A) Unethical
B) Ethical
C) Hypocritical
D) Inconsistent

Question 11

A weak moral person and weak moral manager would generate a reputation of _____________ leadership.

A) Unethical
B) Ethical
C) Hypocritical
D) Inconsistent

Question 12

The principles of ethical power include all of the following except

A) Punishment
B) Purpose
C) Perspective
D) Patience

Question 13

A(n) _______________ leader is one who is focused on creating a positive ethical climate for the firm's employees

A) Transactional
B) Ethical
C) Rational
D) Committed

Question 14

______________ leaders focus on operational and routine activities within a firm, and it is argued that this is not a true style of leadership but instead "managership" in which control is used to protect the status quo of the firm.

A) Transactional
B) Transformational
C) Rational
D) Committed

Question 15

All of the following are major issues that most boards of directors have in common except

A) the annual business plan of the firm
B) Developing departmental production plans
C) The issuance of stock options
D) The issuance of dividends

Question 16

A(n) _____________ board member is one who does not have any direct financial ties to the firm.

A) Related
B) Outside
C) Inside
D) Operational

Question 17

______________ is the means through which firms ensure the needs of all their stakeholders are satisfied.

A) Ethical leadership
B) Corporate governance
C) The board of directors
D) Senior management

Question 18

Which of the following is not recognized as one of the six core ethical values that are recommended to guide the behaviors of board members?

A) Honesty
B) Responsibility
C) Competitiveness
D) Citizenship

Question 19

In the opening case study, Korean Airlines stated initially that Ms. Cho had a responsibility to

A) Demand the flight returned to the departure gate
B) Inspect cabin service and monitor aircraft safety
C) Put pressure on cabin staff
D) Change the flight plans of the aircraft

Question 20

_______________ can be defined as the system that is used by firms to control and direct their operations and the operations of their representatives, the employees.

A) Corporate culture
B) Artifacts
C) Corporate governance
D) Ethical values

Question 21

There are four key characteristics of a strong and effective board member. Which one is not such a characteristic?

A) The majority of the board members are outside members
B) The majority of the board members are large owners of stock in the firm
C) The majority of the board members are also operational managers
D) The majority of the board members are members of a limited number of other boards

Question 22

From the perspective of _____________, high levels of CEO compensation coincide with the agency theory model of maximizing the returns to the stockholders.

A) Ethical egoism
B) Deontological ethics
C) Utilitarian ethics
D) Sidgwick's dualism

Question 23

Transformational leaders create a long-term vision for the firm.

Question 24

From a(n) _______________ perspective, it would be argued that CEO compensation is based on the rights of the individuals and the judgments made with a specific decision process instead of a focus on the decision choices.

A) Deontological
B) Ethical egoism
C) Utilitarian
D) Sidgwick's dualism

Question 25

Great leaders are stewards of the ethical commitment of the firm, and this commitment is transferred to the employees.

Question 26

Transactional leadership is based on inspirational motivation, idealized influence, individualized considerations and intellectual stimulation.

Question 27

An inconsistent leader has strong ethical traits and behavior and can translate those traits to others.

Question 28

Strebel suggests that there are 4 major roles for the board of directors. Which one is not a role he indicates?

A) Auditing
B) Coaching
C) Public relations
D) Steering

Question 29

The principles of ethical power are purpose, perspective, patience, and persistence.

Question 30

The relationship between stakeholders and corporate governance is critical. Which of the following is not one of the criteria for success?

A) Reviewing global compliance standards
B) Examine how its actions affect the corporate image
C) How the ethical vision of top management changes over time
D) Consistently improving financial performance.

Question 31

Corporate governance can be defined as the system that is used by firms to control and direct their operations and the operations of their representatives, the employees.

Question 32

Ethical leadership can be defined as "the demonstration of normatively appropriate conduct through personal actions and interpersonal relationship, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision making."

Question 33

The ____________ board provides the function of validating to shareholders that the CEO is doing what is expected of him or her and that management will make corrective adjustments when necessary.

A) Passive
B) Engaged
C) Certifying
D) Operating

Question 34

From the perspective of ______________, compensation would focus on the consequences of the greatest good to the greatest number of people.

A) Ethical egoism
B) Deontological ethics
C) Utilitarianism
D) Sidgwick's dualism

Question 35

The ____________ actually makes the key decisions for the firm, and the top-level management is responsible for implementing the board's decisions.

A) Intervening board
B) Passive board
C) Certifying board
D) Operating board

Question 36

The ____________ board has a proactive role within the decision-making process.

A) Passive
B) Engaged
C) Reactive
D) Operating

Question 37

It can be argued that CEOs' high level of compensation can be justified based on _____________ ethics.

A) Kantian
B) Deontological
C) Utilitarian
D) Sidgwick's dualism

Question 38

Which board type becomes actively involved in all major decisions of the firm and meets frequently and focuses intensely on all issues on the agenda at the board meetings?

A) Intervening board
B) Passive board
C) Certifying board
D) Operating board

Question 39

____________ in boards occur when the board is composed of mainly inside members

A) Fair compensation
B) Effective leadership
C) Conflicts of interest
D) Long-term vision

Question 40

When the CEO is also the chairman of the board, it is called ____________.

A) CEO universality
B) CEO duality
C) CEO certification
D) CEO intervention

Question 41

The passive board is also called the rubber stamp board.

Question 42

An intervening board allows the CEO and the top management team to take all the major decisions.

Question 43

All of the outside board members should meet at least once a year without the presence of the CEO.

Question 44

When the CEO is also the chairman of the board, it is called CEO duality.

Question 45

In a short essay, list and discuss the six core ethical values that are recommended to guide the behavior of board members.

Question 46

Research has found that there is a direct relationship between CEO compensation and the financial performance of the firm.

Question 47

The certifying board actually makes the key decisions for the firm, and the top-level management is responsible for implementing the board's decisions.

Question 48

In a short essay, describe the following types of leaders based on the combination of moral person and moral manager scenarios: (a) unethical leader, (b) ethical leader, (c) hypocritical leader, and (d) inconsistent leader.

Question 49

The operating board actually makes the key decisions for the firm, and the top-level management is responsible for implementing the board's decisions.

Question 50

In a short essay, discuss corporate governance.

Question 51

The Securities and Exchange Commission in 2004 proposed a code of disclosure that excluded the compensation for the chairman of the board.

Question 52

In a short essay, describe and evaluate Strebel's contingent perspective of corporate governance.

Question 53

In a short essay, define and describe ethical leadership.
a. Ethical leadership is the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships and the promotion of such conduct to followers through two-way communication, reinforcement, and decision making. Ethical leadership is the driving force for a firm to have a positive ethical climate with its employees. With a positive ethical climate, employees have a supportive work environment, which leads to higher commitment and job satisfaction of the employees. Ethical leadership reinforces the beliefs of social learning theory that suggests that when the firm has role models for the employees, the employees will try to copy the behavior of the role models.
Ethical leadership is demonstrated in the leader's various actions. The ethical commitment of the leader affects the leader's character, which influences the leader's motives and influences strategies.
b. Ethical leaders are effective, credible, and legitimate role models to their subordinates. In addition, ethical leaders present a powerful and salient ethical message to subordinates through effective communication and reinforcement. Leaders influence the attitudes, beliefs, and behaviors of employees through either the transactional or the transformational leadership style.