Question 1

The term "corporate governance" refers to the relationship among the board of directors, top management, and the shareholders in determining the direction and performance of the corporation.

Accepted Answer

A) True 
 B)False

Question 2

The role of the board of directors in the strategic management of the corporation is likely to

Accepted Answer

A)   be more active in the future.
B)   be less active in the future.
C)   be nonexistent as planning departments take over.
D)   remain the same.
E)   shift more toward managing daily operations.

Question 3

All of the following are true of the dual chair/CEO position EXCEPT

Accepted Answer

A)   it is being increasingly criticized because of the potential for conflict of interest.
B)   it endangers the ability to properly oversee top management.
C)   it is separated by law in Germany, the Netherlands, and Finland.
D)   it is more popular in American corporations than firms in the United Kingdom.
E)   firms with a dual chair/CEO role have significantly better stock performance.

Question 4

According to the text, which of the following is NOT a typical standing committee of boards of directors?

Accepted Answer

A)   audit committee
B)   compensation committee
C)   executive committee
D)   nominating committee
E)   public relations committee

Question 5

Which of the following is a trend in corporate governance?

Accepted Answer

A)   Boards are getting less involved in shaping corporate strategy.
B)   Shareholders are demanding that directors and top managers own less stock in the company.
C)   Boards are establishing mandatory retirement ages for board members.
D)   Boards are getting larger.
E)   Boards are looking for fewer members with international experience.

Question 6

In implementing the Sarbanes-Oxley Act, the SEC required in 2003 that a company disclose

Accepted Answer

A)   the number of insiders on their PR committee.
B)   if it has adopted a code of ethics that applied to the CEO and the CFO.
C)   the CEO's pay.
D)   the CFO's pay.
E)   all of the above

Question 7

Explain the continuum of board involvement.

Accepted Answer

The board of directors continuum reflect...

Question 8

A study by Korn/Ferry found that ________ of U.S.boards of directors had at least one ethnic minority member in 2007.

Accepted Answer

A)   6%
B)   26%
C)   47%
D)   78%
E)   96%

Question 9

Which of the following is NOT a trend in corporate governance expected to continue?

Accepted Answer

A)   Institutional investors are becoming active on boards.
B)   Boards are getting more involved in shaping company strategy.
C)   Boards are getting larger.
D)   Shareholders are demanding that directors and top managers own more than token amounts of stock in the corporation.
E)   Outside directors are taking charge of annual CEO evaluations.

Question 10

According to the research, in turbulent environments, the best type of planning is

Accepted Answer

A)   top-down strategic planning.
B)   bottom-up strategic planning.
C)   horizontal strategic planning.
D)   concurrent strategic planning.
E)   composite strategic planning.

Question 11

The function of a nominating committee is to

Accepted Answer

A)   find board members who have compatible viewpoints with management.
B)   find outside board members for election by the stockholders.
C)   search for internal employees who would provide valuable insight into the working operations of the corporation.
D)   search for candidates who could bring prestige to the board.
E)   find inside board members for election by the stockholders.

Question 12

When calculating a "deserved pay" for CEOs based upon earnings growth and shareholder return, financial research firm Obermatt found that

Accepted Answer

A)   there is a negative correlation between CEO pay and company performance.
B)   there is a positive correlation between CEO pay and company performance.
C)   there is no correlation between CEO pay and company performance.
D)   CEO pay packages were rejected by 90% of shareholders.
E)   most compensation systems were aligned with the interests of shareholders.

Question 13

Jeff Bezos, CEO of Amazon.com, uses the S team to engage in continuous strategic planning.

Accepted Answer

A) True 
 B)False

Question 14

The role of the board of directors in the strategic management of the corporation is likely to be less active in the future.

Accepted Answer

A) True 
 B)False

Question 15

According to ________ theory, ________ directors tend to identify with the corporation.

Accepted Answer

A)   agency; inside
B)   corporate governance; inside
C)   stewardship; inside
D)   corporate governance; affiliated
E)   stewardship; outside

Question 16

Which of the following statements is true regarding the board of directors?

Accepted Answer

A)   The board is charged by law to act with due care.
B)   If a director or the board as a whole fails to act with due care and, as a result, the corporation is in some way harmed, the careless director or directors can be held personally liable for the harm done.
C)   Director liability insurance is often needed to attract people to become members of boards.
D)   Directors must be aware of the needs of various constituent groups to balance all their interests.
E)   all of the above

Question 17

Which country pioneered the use of worker participation on corporate boards?

Accepted Answer

A)   England
B)   France
C)   Sweden
D)   Japan
E)   Germany

Question 18

Codetermination

Accepted Answer

A)   is the process by which both management and the board establish corporate strategic management.
B)   is the inclusion of a corporation's employees on its board.
C)   occurs when one or more individuals on one board also serve on other boards.
D)   is present when all board members are also employed by the corporation.
E)   occurs when minority shareholders concentrate their votes.

Question 19

The average large, publicly held U.S.corporation has around

Accepted Answer

A)   7 directors.
B)   10 directors.
C)   19 directors.
D)   25 directors.
E)   30 directors.

Question 20

The percentage of directors of small, publicly held U.S.corporations which are outsiders is approximately

Accepted Answer

A)   2 - 12%.
B)   20 - 40%.
C)   40 - 60%.
D)   60 - 80%.
E)   98 - 100%.

Exam 2: Corporate Governance

When calculating a "deserved pay" for CEOs based upon earnings growth and shareholder return, financial research firm Obermatt found that

Correct AnswerverifiedShow Answer

In implementing the Sarbanes-Oxley Act, the SEC required in 2003 that a company disclose

Correct AnswerverifiedShow Answer

The percentage of directors of small, publicly held U.S.corporations which are outsiders is approximately

Correct AnswerverifiedShow Answer

A study by Korn/Ferry found that ________ of U.S.boards of directors had at least one ethnic minority member in 2007.

Correct AnswerverifiedShow Answer

All of the following are true of the dual chair/CEO position EXCEPT

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The term "corporate governance" refers to the relationship among the board of directors, top management, and the shareholders in determining the direction and performance of the corporation.

Correct AnswerverifiedShow Answer

Which country pioneered the use of worker participation on corporate boards?

Correct AnswerverifiedShow Answer

The average large, publicly held U.S.corporation has around

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Which of the following is NOT a trend in corporate governance expected to continue?

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Codetermination

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The role of the board of directors in the strategic management of the corporation is likely to

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According to ________ theory, ________ directors tend to identify with the corporation.

Correct AnswerverifiedShow Answer

The role of the board of directors in the strategic management of the corporation is likely to be less active in the future.

Correct AnswerverifiedShow Answer

According to the research, in turbulent environments, the best type of planning is

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Explain the continuum of board involvement.

Correct AnswerverifiedThe board of directors continuum reflect...View AnswerShow Answer

Which of the following statements is true regarding the board of directors?

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Which of the following is a trend in corporate governance?

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According to the text, which of the following is NOT a typical standing committee of boards of directors?

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The function of a nominating committee is to

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Jeff Bezos, CEO of Amazon.com, uses the S team to engage in continuous strategic planning.

Correct AnswerverifiedShow Answer

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According to theory, directors tend to identify with the corporation.

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The board of directors continuum reflect...
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