Question 1

Managerial human capital refers to the skills and abilities of top managers and directors.

Accepted Answer

A) True 
 B)False

Question 2

​The service aspect of the role that boards of directors perform is to:

Accepted Answer

A)   ​Challenge managerial decisions.
B)   ​Advise the CEO.
C)   ​Protect shareholder interests.
D)   ​Rubber stamp managerial actions.

Question 3

Can interlocking directorates lead to unfair market advantages and investor exploitation? How?

Accepted Answer

If the CEO of Firm A is on the board of ...

Question 4

​The ability to successfully list a foreign firm on a high-profile exchange such as NYSE leads to a higher valuation for that firm as opposed to domestic firms.

Accepted Answer

A) True 
 B)False

Question 5

​The governance mechanisms that affect corporations in the United States and United Kingdom are characterized by market-oriented systems and strong external mechanisms.

Accepted Answer

A) True 
 B)False

Question 6

​In recent years,CEO duality has:

Accepted Answer

A)   ​Is no longer allowed for firms operating in the United States.
B)   ​Increased from 12% in 2002 to 48% in 2010.
C)   ​Become a less common practice among firms around the world.
D)   ​Decreased based on conclusive research evidence showing it is less effective than nonduality.

Question 7

Agency theory assumes that managers:

Accepted Answer

A)   Have a responsibility to the owners.
B)   Avoid opportunistic and self-serving activities.
C)   Eliminate agency costs.
D)   Can be left to their own devices.

Question 8

Which of the following is true in regard to outside directors?

Accepted Answer

A)   The trend around the world is to introduce fewer outside directors.
B)   In the United States,less than a half century ago,most boards were made up entirely or largely of outside directors.
C)   Many U.S.firms are now favoring a board that is entirely made of people who are insiders due the need for people who can understand the increasing complexity of MNEs.
D)   Academic research has failed to empirically establish a link between the outsider/insider ratio and firm performance.

Question 9

The rise of capitalism has not affected governance.

Accepted Answer

A) True 
 B)False

Question 10

The trend since the 1980s has been for expanded state ownership and declining privatization.

Accepted Answer

A) True 
 B)False

Question 11

The market for corporate control is another term for the stock market.

Accepted Answer

A) True 
 B)False

Question 12

​Internal governance mechanisms employed by boards of directors include "carrots" and "sticks."

Accepted Answer

A) True 
 B)False

Question 13

Most large,publicly traded UK corporations are now characterized by all of the following except:

Accepted Answer

A)   Diffused ownership.
B)   Numerous small shareholders.
C)   A separation of ownership and control.
D)   Corporate managers who own a majority of the stock.

Question 14

Founders usually start up firms and completely own and control these enterprises.

Accepted Answer

A) True 
 B)False

Question 15

​Information asymmetries are a major source of agency problems.

Accepted Answer

A) True 
 B)False

Question 16

Principal-principal conflicts occur within one class of principals,such as a disagreement among certain majority stockholders and other majority stockholders.

Accepted Answer

A) True 
 B)False

Question 17

​Following the notion of a board of directors providing "carrots" and "sticks" for a firm's management,which of the following would be considered a "stick"?

Accepted Answer

A)   ​Pay for performance.
B)   ​Stock options.
C)   ​CEO dismissal.
D)   ​Golden parachutes.

Question 18

Institution-based considerations in governance include all of the following EXCEPT:

Accepted Answer

A)   Formal institutional framework.
B)   International experience of senior executives.
C)   Impact of informal norms and values.
D)   Lack of legal protection and its impact regarding large shareholders in emerging economies.

Question 19

​An often-mentioned drawback of state -owned enterprises is:

Accepted Answer

A)   ​An ability to avoid bankruptcy and job loss.
B)   ​Frequent conflict between ownership and management.
C)   ​Little incentive to improve performance.
D)   ​All of the above.

Question 20

​Which of the following would be considered a benefit to having inside directors on a board of directors?

Accepted Answer

A)   ​Greater independence from managerial influence
B)   ​Greater first-hand knowledge about the firm.
C)   ​More effective control of managers.
D)   ​None of the above.

Exam 11: Governing the Corporation Around the World

​The service aspect of the role that boards of directors perform is to:

Correct AnswerverifiedShow Answer

​Which of the following would be considered a benefit to having inside directors on a board of directors?

Correct AnswerverifiedShow Answer

Most large,publicly traded UK corporations are now characterized by all of the following except:

Correct AnswerverifiedShow Answer

​In recent years,CEO duality has:

Correct AnswerverifiedShow Answer

The market for corporate control is another term for the stock market.

Correct AnswerverifiedShow Answer

​Internal governance mechanisms employed by boards of directors include "carrots" and "sticks."

Correct AnswerverifiedShow Answer

​An often-mentioned drawback of state -owned enterprises is:

Correct AnswerverifiedShow Answer

Agency theory assumes that managers:

Correct AnswerverifiedShow Answer

Can interlocking directorates lead to unfair market advantages and investor exploitation? How?

Correct AnswerverifiedIf the CEO of Firm A is on the board of ...View AnswerShow Answer

​Information asymmetries are a major source of agency problems.

Correct AnswerverifiedShow Answer

Which of the following is true in regard to outside directors?

Correct AnswerverifiedShow Answer

​Following the notion of a board of directors providing "carrots" and "sticks" for a firm's management,which of the following would be considered a "stick"?

Correct AnswerverifiedShow Answer

The rise of capitalism has not affected governance.

Correct AnswerverifiedShow Answer

Institution-based considerations in governance include all of the following EXCEPT:

Correct AnswerverifiedShow Answer

The trend since the 1980s has been for expanded state ownership and declining privatization.

Correct AnswerverifiedShow Answer

Principal-principal conflicts occur within one class of principals,such as a disagreement among certain majority stockholders and other majority stockholders.

Correct AnswerverifiedShow Answer

Founders usually start up firms and completely own and control these enterprises.

Correct AnswerverifiedShow Answer

Managerial human capital refers to the skills and abilities of top managers and directors.

Correct AnswerverifiedShow Answer

​The governance mechanisms that affect corporations in the United States and United Kingdom are characterized by market-oriented systems and strong external mechanisms.

Correct AnswerverifiedShow Answer

​The ability to successfully list a foreign firm on a high-profile exchange such as NYSE leads to a higher valuation for that firm as opposed to domestic firms.

Correct AnswerverifiedShow Answer

The service aspect of the role that boards of directors perform is to:

Correct Answer
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Which of the following would be considered a benefit to having inside directors on a board of directors?

Correct Answer
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Correct Answer
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In recent years,CEO duality has:

Correct Answer
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Correct Answer
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Internal governance mechanisms employed by boards of directors include "carrots" and "sticks."

Correct Answer
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An often-mentioned drawback of state -owned enterprises is:

Correct Answer
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Correct Answer
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Correct Answer
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If the CEO of Firm A is on the board of ...
View Answer

Information asymmetries are a major source of agency problems.

Correct Answer
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Correct Answer
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Following the notion of a board of directors providing "carrots" and "sticks" for a firm's management,which of the following would be considered a "stick"?

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

The governance mechanisms that affect corporations in the United States and United Kingdom are characterized by market-oriented systems and strong external mechanisms.

Correct Answer
verified

The ability to successfully list a foreign firm on a high-profile exchange such as NYSE leads to a higher valuation for that firm as opposed to domestic firms.

Correct Answer
verified