MGMT 4000 – CHAPTER 2 LATEST VERSION 2025 WITH
100 COMPLETE QUESTIONS AND ACCURATE
VERIFIED ANSWERS GRADED A+
The combined chairperson/CEO position is being increasingly criticized
because of the potential for conflict of interest. -Correct Answer- TRUE
Korn/Ferry International reported that amongst the 100 largest
companies listed in 2011 ________ of boards of directors had at least
one female director. -Correct Answer- 96%
A study by Korn/Ferry found that ________ of U.S. boards of directors
had at least one ethnic minority member in 2007 -Correct Answer- 78%
The vast majority of inside directors are from all of the following
EXCEPT -Correct Answer- lower-level operating employee
Codetermination -Correct Answer- is the inclusion of a corporation's
employees on its board
Which country pioneered the use of worker participation on corporate
boards? -Correct Answer- Germany
Under what circumstances does a DIRECT interlocking directorate
exist? -Correct Answer- occurs when two firms share a director or when
an executive of one firm sits on the board of a second firm
Under what circumstances does an INDIRECT interlocking directorate
exist? -Correct Answer- when two corporations have directors who serve
on the board of a third firm
Contrast agency theory -Correct Answer- Agency theory states that
problems arise in corporations because the agents (top management) are
not willing to bear responsibility for their decisions unless they own a
, substantial amount of stock in the corporation. The theory suggests that
a majority of a board needs to be from outside the firm so that top
management is prevented from acting selfishly to the detriment of the
shareholders.
Stewardship Theory -Correct Answer- Stewardship theory proposed
that, because of their long tenure with the corporation, insiders (senior
executives) tend to identify with the corporation and its success. Rather
than use the firm for their own ends, these executives are thus most
interested in guaranteeing the continued life and success of the
corporation.
Explain the difference between a direct and indirect interlocking
directorate. -Correct Answer- A direct interlocking directorate occurs
when two firms share a director or when an executive of one firm sits on
the board of a second firm. An indirect interlock occurs when two
corporations have directors who also serve on the board of a third firm.
Why is the use of the combined Chair/CEO role being increasingly
criticized? -Correct Answer- conflict of interest
The New York Stock Exchange (NYSE) requires corporations to have -
Correct Answer- an audit committee composed entirely of independent,
outside members
The Sarbanes-Oxley Act was designed to protect -Correct Answer-
shareholders from the excesses and failed oversight of firms.
In implementing the Sarbanes-Oxley Act, the SEC required in 2003 that
a company disclose -Correct Answer- if it has adopted a code of ethics
that applied to the CEO and the CFO
Which of the following is not one of the four major issues researched by
the S&P Corporate Governance Scoring System? -Correct Answer-
research and development initiatives
100 COMPLETE QUESTIONS AND ACCURATE
VERIFIED ANSWERS GRADED A+
The combined chairperson/CEO position is being increasingly criticized
because of the potential for conflict of interest. -Correct Answer- TRUE
Korn/Ferry International reported that amongst the 100 largest
companies listed in 2011 ________ of boards of directors had at least
one female director. -Correct Answer- 96%
A study by Korn/Ferry found that ________ of U.S. boards of directors
had at least one ethnic minority member in 2007 -Correct Answer- 78%
The vast majority of inside directors are from all of the following
EXCEPT -Correct Answer- lower-level operating employee
Codetermination -Correct Answer- is the inclusion of a corporation's
employees on its board
Which country pioneered the use of worker participation on corporate
boards? -Correct Answer- Germany
Under what circumstances does a DIRECT interlocking directorate
exist? -Correct Answer- occurs when two firms share a director or when
an executive of one firm sits on the board of a second firm
Under what circumstances does an INDIRECT interlocking directorate
exist? -Correct Answer- when two corporations have directors who serve
on the board of a third firm
Contrast agency theory -Correct Answer- Agency theory states that
problems arise in corporations because the agents (top management) are
not willing to bear responsibility for their decisions unless they own a
, substantial amount of stock in the corporation. The theory suggests that
a majority of a board needs to be from outside the firm so that top
management is prevented from acting selfishly to the detriment of the
shareholders.
Stewardship Theory -Correct Answer- Stewardship theory proposed
that, because of their long tenure with the corporation, insiders (senior
executives) tend to identify with the corporation and its success. Rather
than use the firm for their own ends, these executives are thus most
interested in guaranteeing the continued life and success of the
corporation.
Explain the difference between a direct and indirect interlocking
directorate. -Correct Answer- A direct interlocking directorate occurs
when two firms share a director or when an executive of one firm sits on
the board of a second firm. An indirect interlock occurs when two
corporations have directors who also serve on the board of a third firm.
Why is the use of the combined Chair/CEO role being increasingly
criticized? -Correct Answer- conflict of interest
The New York Stock Exchange (NYSE) requires corporations to have -
Correct Answer- an audit committee composed entirely of independent,
outside members
The Sarbanes-Oxley Act was designed to protect -Correct Answer-
shareholders from the excesses and failed oversight of firms.
In implementing the Sarbanes-Oxley Act, the SEC required in 2003 that
a company disclose -Correct Answer- if it has adopted a code of ethics
that applied to the CEO and the CFO
Which of the following is not one of the four major issues researched by
the S&P Corporate Governance Scoring System? -Correct Answer-
research and development initiatives
