c. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities b. the board includes employees as voting members. The fact that a hostile takeover has occurred is proof that the firm was under-performing. b. a standstill agreement. ANS: D PTS: 1 DIF: Medium d. d. The compensation committee may not have comprehensive firm performance data. c. elevation of foreign executive compensation to U.S. levels. d. a system of cross-shareholding among firms. Research suggests that boards of directors perform betterif a. the CEO is also the chairperson of the board ofdirectors. d. The CEO and top executives should not consider their jobs secure. What amount should Stallman report as its December 31 inventory? It might be unconscious bias. b. higher c. managers' risk of job loss, loss of compensation, and/or loss of reputation. Knowledge at Wharton is an affiliate of the Wharton School of the University of Pennsylvania. 48 c. poorly-performing firms Diversity advocates often argue that gender-diverse boards make better decisions than all-male boards. "A virtually exclusive reliance on financial controls may occur when outsider-dominated boards exist. But academic research says otherwise. a. b. d. outside directors own significant equity in the organization. Let The repurchase at a premium of shares of stock that have been acquired by the aggressor firm in a hostile takeover in exchange for an agreement that the aggressor will no longer target the company for takeover is called: c. incentives for Who is ultimately responsible for the corporate climate that resulted in this wrongdoing? d. reduce the size of the stock option package provided to Mr. Leagreet. When executives have ownership positions or stock options with their employing firm, they are b. c. safer strategies with more focused diversifica-tion for the firm. c. liable for any illegal actions by the top management team. c. the board is homogenous in composition. For a board comprised of lawyers, this might mean adding an engineer and a sociologist in the mix. b. Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. Corporate governance and board effectiveness 2.0 - ResearchGate c. crossing the palm with silver. a. some foreign firms have delisted on U.S. stock exchanges. Prior research on the effects of institutional investors often addresses shareholders and bondholder wealth and is commonly based on the framework of the conventional US/UK model of corporate control (Elyasiani et al. These dynamics appear to shape whether diversity on the board actually matters to the boards work. To make diverse boards more effective, boards need to have a more egalitarian culture one that elevates different voices, integrates contrasting insights, and welcomes conversations about diversity. b. strengthens the governance processes of the firm. a. b. risks borne by b. the board of directors of IFS "Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. The average correlation between board gender diversity and firm accounting performance, Post and Byron found, was .047. Managers may decide to invest ____ in products that are not associated with the firm's current lines of business to increase the firm's level of diversification and decrease their employment risk. c. used to reduce corporate debt. Our latest report shows not only that the business case remains robust but also that the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time. d.the difference in risk propensity between owners and managers. One means that is considered to improve the effectiveness of outside directors is How Analytics Can Boost Competitiveness in Sports, How Data Analytics Can Help Deliver Social Good, Why Employee-owned Companies Are Better at Building Worker Wealth, Investing in Refugee Entrepreneurs in East Africa, How Companies and Capital Can Be Forces for Good, Great Question: Witold Henisz on ESG Initiatives, Great Question: Wendy De La Rosa on Personal Finance, Great Question: Dean Erika James on Crisis Management, Great Question: Kevin Werbach on Cryptocurrency and Fintech, Diversity at Work: Why Inclusive Storytelling Matters, How National Politics Are Impacting DEI in the Workplace, Action, not Words: Creating Gender and Racial Equity at Work, The Innovation Tournament Handbook: A Conversation with Christian Terwiesch and Karl Ulrich, Meet the Authors: Erika James and Lynn Perry Wooten on The Prepared Leader, Meet the Authors: Whartons Peter Cappelli on The Future of the Office, Meet the Authors: Mauro Guilln on How Businesses Succeed in a Global Marketplace, Speak With Confidence: Four Fixes That Work, Choosing a New Board Leader: Eight Questions, Crisis Leadership: Harness the Experience of Others, How to Use Neuroscience to Build Team Chemistry. d.government agencies. Which of the following reasons would NOT explain the difficulty of determining appropriate executive compensation? a. the director of food service for IFS The board has been successful in reducing the percentage of CEO pay that is com-posed of stock options. c. the government. a. An agency relationship exists when one party delegates His current boards are shifting to a different approach: a process of assessment where you periodically look at the skill sets that you would ideally want on the board, given the business its in, and then the skill sets you have, and you identify any missing. Nor do they perform worse.. b. banks and other lending institutions that have provided major financing to the firm. But, thats impossible here; we cant randomly assign board members to companies. The chapter Opening Case indicates that many CEOs earn more than ____times the amount re-ceived by their firm's lowest-paid employee. And the greater the cognitive diversity, the better the board is at solving complex problems and coming up with novel solutions. If Culver had just signed a blank piece of paper after being told that the bank would make a receipt out of it by printing the appropriate words around his signature, would he be able to avail himself of the defense of fraud? Access more than 40 courses trusted by Fortune 500 companies. d.over-valued firms. b. long-term incentives such as stock options. d.potential tax burden for. Writing recently on Huffington Post, for example, one consultant observed the following: Companies with gender-diverse management teams have been proven to consistently perform better and be more profitable than those without them. For instance, they found that boards with diverse directors in key positions tended to perform better, suggesting that there was no quality issue involved in the lack of appropriate representation. "The interests of multinational corporations' shareholders may be best served when there is: d. reduce their employment risk, increase the company's value, Agency costs reflect all of the following EXCEPT ____ costs. Ambrose received: shipping point, and $22,000 of goods sold to Alvarez Company for$30,000, f.o.b. On more hierarchical boards, the CEO, Chairman, or lead independent director tends to dominate board meetings. The decisions made by top-level managers are typically complex and nonroutine. d. defense tactics make the costs of a takeover lower. d. riskier strategies with greater diversification for the firm. "Managers in the U.S. receive ____ compensation than managers in the rest of the world. Indeed, this is what Post and Byrons meta-analysis showed. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. c. the employees directly involved in the wrongdoing "Usually, large block shareholders are considered to be those shareholders with at least ____ percent of the firm's stock. The repurchase at a premium of shares of stock that have been acquired by the aggressor firm in a hostile takeover in exchange for an agreement that the aggressor will no longer target the com-pany for takeover is called b. insuring that the strike price value of the options can be lowered if the organizational environ-ment becomes more risky. In this opinion piece, Wharton management professor Katherine Klein summarizes academic research on the topic and discusses the possible reasons and implications for these surprising findings. Couple times it hasnt been but someone will just say, Hey thats not very respectful, you know the way you just said that., Several interviewees told us that boards that value open communication are more likely to engage in conversations about diversity even those that believe they still have a long way to go. c. incentives for The decisions made by top-level managers are typically complex and nonroutine. People believed that the company that appointed Marilyn cared more about improving the social performance of the firm and less about maximizing shareholder value, compared to the company that appointed Jack. d. banks. c. 50 b. Evidence that board diversity benefits firms, however, has been mixed. Which of the following is a FALSE statement about corporate governance? c. equally as common as data values close to the mean. b. the board includes employees as voting members. a. installation of an outsider as the lead director on the Board of Directors. b. the market for corporate control. b. strengthening the internal management and accounting control systems Boards of directors are now becoming more involved in - Course Hero The Sarbanes-Oxley Act requires all of the following EXCEPT: b. a. risk that managers will behave opportunistically. a. lead independent c. the firm's tax issues. 5 a. d.a poison pill. When executives have ownership positions or stock options with their employing firm, they are: c. poorly-performing firms Research has found little to no evidence supporting the idea that companies with female board directors perform better than companies run by all-male boards. At a meeting over dinner, the top management team agrees to go to the board of directors with a proposal for a. increases. c. crossing the palm with silver. a. elect an insider as the lead director. b. government auditors. A takeover defense wherein preferred stock in the merged firm is offered to shareholders at a highly attractive rate of exchange is called a. shareholders in the large institutional firms listed on the New York Stock Exchange. The board has been successful in reducing the percentage of CEO pay that is composed of stock options. d. Firms with higher state ownership tend to have lower market value and more vola-tility in those values over time. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. d. the top management team's interests and the owners' interests are aligned. a. generate free cash flows, reduce the risk of total firm failure c. The state is becoming far less dominant in determining the strategies employed by most firms. b. higher Activist shareholders are not necessarily more convinced about diversity being a source of value creation. b. typically under-performing their industry. d.For legal reasons, the board cannot consider the interests of CalPERS over the interests of its top executives. In the U.S., the fundamental goal of business is to, In the U.S., a firm's key stakeholder(s) is(are) the. Why Investors React Negatively to Companies That Put Women on Their Boards If these dynamics occur within corporate boards, boards may not take full advantage of their own cognitive variety. d. potential tax burden for. By studying outcomes that are more proximal or immediately related to board decision-making than is company performance, researchers may shed more light on when, whether, and how diverse boards differ from all-male boards. a. management structures related to total quality management systems. a. In contrast to managers' desires, shareholders usually prefer that free cash flows be The women named to corporate boards may not in fact differ very much in their values, experiences, and knowledge from the men.. This may lead to all EXCEPT: a. making CEOs more accountable for their performance. In a study of 1,069 leading firms across 35 countries and 24 industries, we found that gender diversity relates to more productive companies, as measured by market value and revenue, only in . b. decreases. And to the extent investors care about shareholder value, they will penalize those companies they suspect are putting other goals first. d. governmental relations. What other expenses might it expect? Besides the name of the director, the press releases were identical. The directors are all outsiders, experienced, and run their own successful firms. d. Banks have less influence on the governance of German corporations than they do on U.S. corporations. b. strengthening the internal management and accounting control systems Am-brose received "There is some evidence that those firms targeted for takeover by active corporate raiders are: How diversity, equity, and inclusion (DE&I) matter | McKinsey c. strategy implementation actions to functional managers. Boards that want to maximize their effectiveness need to do more to ensure that different perspectives are regularly elicited and integrated into the boards work. Its hard to get much closer to zero. You need the right culture and structure. a. ownership concentration. d.governmental relations. Compensation of CEOs in both private and public companies is being tied more closely to observable performance goals. Japanese keiretsu are d.made up of CPAs with auditing experience. Historically, ____ have been at the center of German corporate governance structure. People coming from that diverse role I think really does help a board to get better results.. Still, the relationship between gender diversity and accounting returns was tiny. c. the firm's tax issues. b. ensure that the interests of top-level managers are aligned with the interests of shareholders. c. Borders' decision to increase the size of its board d. reduction in R&D expenditure.
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