the board is homogenous in composition. b. banks and other lending institutions that have provided major financing to the firm. The fact that a hostile takeover has occurred is proof that the firm was under-performing. c. the board is homogenous in composition. a. monitoring All of the following are consequences of the Sarbanes-Oxley Act EXCEPT Institutional Directors: Types. a. organizational performance. There is overwhelming evidence to support the value of having more women in senior leadership positions. Let c. the government. One shared: I have some influence, and Im trying to exert my influence.. b. government auditors. c. defense tactics are typically ineffective in deterring the takeover. d.penalties for inadequate firm performance. b. stock brokerage companies. Older boards are better boards, so beware of diversity targets a. defense tactics are usually beneficial for the executives of the target firm. If male and female board members are fairly similar in their values, experience, and knowledge, the addition of women to an all-male board may not increase the boards cognitive variety as one might expect at first blush. a. reasonably compensating a CEO. Further, there is no evidence available to suggest that the addition, or presence, of women on the board actually causes a change in company performance. b. enforcement There have been many rigorous, peer-reviewed studies of board gender diversity. As ownership of the corporation is diffused, shareholders' ability to monitor managerial deci-sions A major conflict of interest between top executives and owners, is that top executives wish to diversify the firm in order to ____, while owners wish to diversify the firm to ____. a. the number of stockholders and the parties they represent. The board of directors and firm innovation: A meta-analytical review They increase the boards cognitive variety. The greater a boards cognitive variety, the theory goes, the more options it is likely to consider and the more deeply it is likely to debate those options. c. Research shows that once a hostile takeover has been defeated, the firm is safe from other hostile takeover attempts for many years. b. organizational size. d.risk managers will not find a new top management position if they should be dismissed. Mr. Abercrombie has had striking success in reducing conflict and hostility among directors and allowing boards to develop more cohesiveness. b. Rigorous, peer-reviewed studies suggest that companies do not perform better when they have women on the board. d. reduction in R&D expenditure. d.the head of contract services for the Marines, Chapter 11: Organizational Structure and Cont, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine, Information Technology Project Management: Providing Measurable Organizational Value, Operations Management: Sustainability and Supply Chain Management, canvas quiz : Blood vessels and circulation. "In Japan, the principal source of the active monitoring of large companies comes from: d. the head of contract services for the Marines. c. Competition d. a poison pill. A recent study, of board. Corporate Directors' Implicit Theories of the Roles and Duties of Boards c. large block shareholders such as mutual funds and pension funds. 2010).These studies generally focus on institutional investors as shareholders (Roberts and Yuan 2006), and when they do address the role of . The research found that diversity doesnt guarantee a better performing board and firm; rather, the culture of the board is what can affect how well diverse boards perform their duties and oversee their firms. c. determined by the size of the firm. Combined, the board members held seats on 47 corporate boards in the U.S. across a variety of industries. c. crossing the palm with silver. Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(an) ____ director. If the market for corporate control were efficient as a governance device, then only ____ would be targets for takeovers. "Japanese keiretsu are: Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. This will have no effect on the stock option plan design discussion, because CalPERS' main concern is stock dividends. b. enforcement a. lead independent "In the U.S. the fundamental goal of business is to: "In the U.S., a firm's key stakeholder(s) is(are) the: "Which of the following is NOT an internal governance mechanism? b. may not have a direct effect on firm performance. Which of the following statements is about corporate governance in Germany is FALSE? d.Mr. These dynamics appear to shape whether diversity on the board actually matters to the boards work. An immense investigative effort has been devoted to these questions: over 140 studies in the past several decades, conducted in dozens of countries, and published in journals from many different disciplines and theoretical traditions. c. marginal profits If investors are indeed interpreting female appointments as a sign that the company is less committed to maximizing returns to their shareholders, the effect of increases in board diversity should be larger for those companies that demonstrate commitment to social goals in other ways. a. the CEO is also the chairperson of the board of directors. d.potential tax burden for. The apartment is hot or the air conditioner is not working , if and only if the temperature is 9090^{\circ}90. Research suggests that boards of directors perform - Course Hero A majority of the directors are concerned that while Mr. Leagreet has been responsible for the firm's earning above-average returns, that he has been displaying a tendency toward personal extravagance at the firm's expense. a. d.greater concentration on Sierra's core industry. a. d. Firms with higher state ownership tend to have lower market value and more vola-tility in those values over time. a. going to actively defend their firm from takeover attempts. shipping point, and $22,000 of goods sold to Alvarez Company for$30,000, f.o.b. MGMT Chapter 10 Flashcards | Quizlet "Compared to managers, shareholders prefer: More Evidence That Company Diversity Leads To Better Profits - Forbes b. d.government agencies. We also asked them to evaluate the competence of the new board member. c. agency 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. Can you catch two birds with one stone? The impacts of nominating a. elect an insider as the lead director. d. Corporate governance is best achieved with a board of directors with strong ties to management. c. often performing above their industry averages. d.internal auditing costs have increased by about one-third. Consequently, the board has decided on an incentive plan that involves payout based on the firm's performance five years in the future. (2020) finds that firms with older boards perform better than those with younger boards in terms of ROA. performance of boards of directors and how various studies have tackled this challenge. The fact that a hostile takeover has occurred is proof that the firm was un-der-performing. d. the board of directors. c. require Mr. Leagreet to personally certify the firm's financial reports. a. ownership concentration. the board includes employees as voting members.c. b. increase the price of the firm's stock, increase the dividends paid out from free cash flows b. the board of directors of IFS German executives are not dedicated to the maximization of shareholder value largely because Its hard to get much closer to zero. What difference can Archibald expect? a. increases shareholder value significantly. But are investors walking the walk on board diversity? b. a poison pill. The New York Stock Exchange requires that the audit committee be After all, both male and female board members are likely to be selected for their professional accomplishments, experience, and competence. the CEO is also the chairperson of the board of directors.b. d.establishing and using formal processes to evaluate the board's performance. Many boards continue to recruit directors from the pool of current or former CEO/CFOs, and changing demographics within these pools do present opportunities to recruit more diverse members. b. In other words, investors seem to be penalizing, rather than rewarding, companies that strive to be more inclusive. This is in line with numerous academic studies that have found little to no evidence supporting the idea that board diversity leads to better financial performance. While the relationship between board gender diversity and company performance is very weak, there appears to be a somewhat stronger relationship between board gender diversity and corporate social responsibility (CSR). b. government auditors. The slow progress on gender diversity has frustrated policymakers, industry groups, and institutional investors, many of whom have publicly advocated for inclusion of women and minorities among the top ranks of management. b. more common than data values close to the mean. a. The Sarbanes-Oxley Act requires all of the following EXCEPT: For example, a few years ago, Apples shareholders voted against recruiting more minorities to its top management team, after the company argued that such a measure would be overly restrictive. Even if women who are named to corporate boards are different from the men on these boards and even if the women do speak up and influence board decision-making, their influence may not be consistently positive (or consistently negative, for that matter). d.re-invested in additional corporate assets. Which of the following is FALSE about corporate governance in China? a. b. appoint another individual as chairperson of the Board of Directors. b. riskier strategies with more focused diversification for the firm. Working in a group, discuss how the New Therapy Company can meet the deadline and still ensure a high quality of care. b. internal auditing scrutiny has improved and there is greater trust in financial report-ing. d. This type of plan is likely to cause the CEO to underinvest in R&D in order to boost CamCell's long-term profitability. Many of our interviewees suggested that their boards had made progress on gender diversity but not on other forms of social diversity such as race, nationality, and age. And to the extent investors care about shareholder value, they will penalize those companies they suspect are putting other goals first. d. prevented by the Sarbanes-Oxley Act from owning more than 50% of the stock of any one firm. c. Banks' influence over corporations is increas-ing. a. going to actively defend their firm from takeover attempts. But while many prescriptions for improving corporate governance focus on the structure of. In research over the last five years, we found that only 24 percent of the boards of companies listed in the US and having over $1 billion in revenues were digitally savvy, and that these companies outperformed the others in our research on key metrics. The market for corporate control may not be as efficient as previously thought as recent findings suggest that those firms targeted for takeover by active corporate raiders are b. likely to gain financially if their employing firm is taken over by another. "The use of excessively-generous stock options for executive compensation has been slowed in the past couple years for all of the following reasons EXCEPT: "Archibald Smith has moved from an upper-middle management job at Chromatic Array, Inc., to a similar position with Pixilair Corporation. c. Institutional investors disapprove of long-term executive incentive plans and they may sell their blocks of stock in CamCell. b. a number of publicly-traded companies have decided to privatize. "The board of directors of CyberScope, Inc., is designing a stock option plan for its CEO that will motivate the CEO to increase the market value of the firm. One explained that their collegial board culture resulted from information being shared openly, with little back channeling or meeting outside of the formal meeting to raise concerns. c. reduce the risk of total firm failure, reduce their total portfolio risk b. primary focus is on maximizing shareholder value. The gap between CEO pay and the pay of other top executives at Chromatic was significantly larger than at Pixilair. c. the board is homogenous in composition. Write the statements in symbolic form . Five or so years after the financial crisis, the pressure on boards and directors to raise their game remains acute. c. the government. This plan will be very attractive in luring candidates for the CEO position. The CEO was involved in overstating company revenues and profits. a. some foreign firms have delisted on U.S. stock exchanges. Despite popular press accounts that suggest that teams high in gender diversity outperform those composed only of men or only of women, rigorous research does not support this conclusion. b. a. installation of an outsider as the lead director on the Board of Directors. c. large; small Ownership concentration is determined by both But, thats impossible here; we cant randomly assign board members to companies. Firms should be selecting the very best directors from the largest talent pool possible, and excluding women from that pool to avoid market penalties would be counterproductive. James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. d.defense tactics make the costs of a takeover lower. For example, Norway, Spain, France, and Iceland all have laws requiring that women comprise at least 40% of boards at publicly listed companies. b. insuring that the strike price value of the options can be lowered if the organiza-tional environment becomes more risky. a. usually on the verge of bankruptcy. a. a uniform compensation plan for all corporate executives, U.S. and foreign alike. Women should be appointed to boards for reasons of gender equality, but not because gender diversity on boards leads to improvements in company performance. c. crossing the palm with silver. "There is some evidence that performance bonuses for executives based on annual results are ____ investments in R&D where the firm was highly diversified. For an all-American board this might mean including individuals from other countries. a. a. bonuses. c. reduce the risk of total firm failure, reduce their total portfolio risk d. greater concentration on Sierra's core industry. What circumstances would most likely have initiated this proposal? The CEO would pick up the phone frequently and connect us., Whoever is leading the board also has the responsibility of ensuring that quieter board members speak up in board meetings. At the board of directors level, more ethnically and cultural diverse companies were 43% more likely to see. b. the total revenue of the firm. d.requiring that outside directors be truly objective by having no ownership interest in the firm. "There is some evidence that those firms targeted for takeover by active corporate raiders are: c. the corporation has greatly exceeded perform-ance expectations. c. the employees directly involved in the wrongdo-ing. a. boards of directors. Diversity doesnt matter as much on boards where members perspectives are not regularly elicited or valued. And even when individuals who are minorities, tokens, or outliers speak up, the majority group members may discount their views. Chapter 10 (Multiple Choice) Flashcards | Quizlet b. long-term firm performance is more easily manipulated by the board of directors through financial and accounting methods than are shorter-term measures of firm performance. c. 50 b. the manager frequently invests in the acquired firm which allows him or her exten-sive profits, the manager can frequently buy excess assets divested by the acquired firm b. the board includes employees as voting members. c. the board is homogenous incomposition. She shared, I can understand what it means to be a token person. c. increased shareholder participation in decision making. During the debate, one of the directors raises the point that CalPERS owns a significant portion of Acme Brand stock. b. defense tactics are opposed by institutional investors. c. liable for any illegal actions by the top management team. b. stock brokerage companies. b. firms earning above-average returns b. institutional shareholders Researchers studied 1,644 public companies. d. The firing by President Obama of the CEO of General Motors because the board had failed to act in previous years. How diversity, equity, and inclusion (DE&I) matter | McKinsey b. riskier strategies with more focused diversifica-tion for the firm. Increased regulation in the financial sector has increased the cost of mounting hos-tile takeovers. "Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(an) ____ director. "International Food Services (IFS) has a contract with the Marines to supply meals for it troops in Iraq and other foreign assignments. d.more variable. c. German firms will not be interested in Mr. Abercrombie's services because the German system of decision-making is based on authority and few conflicts emerge. a. ownership concentration. Which of the following statements is most likely to be TRUE? As an illustration, I show that two current measures of board of director performance, board meeting activity and director attendance, suggest that the boards of Asian firms do not compare favorably to the boards of firms from developed markets. Complete the following: In small firms, managers often own a ____ percentage of the firm, which means there is ____ separation between ownership and managerial control. a. the firm is overpriced in the market. d. Large institutional investors such as pension funds, and insurance companies are relatively insignificant owners of corporate stock. b. higher "Research suggests that boards of directors perform better if: d.This type of plan is likely to cause the CEO to underinvest in R&D in order to boost CamCell's long-term profitability. b. a poison pill. d. re-invested in additional corporate assets. The best evidence comes from a recent meta-analysis of 146 studies (Jeong and Harrison, 2017). d. Banks have less influence on the governance of German corporations than they do on U.S. corporations. Cultivate trust and encourage the board to be involved in strategy. Institutional Investors on Boards: Does Their Behavior Influence The research found that diversity doesnt guarantee a better performing board and firm; rather, the culture of the board is what can affect how well diverse boards perform their duties and oversee their firms. d. outside directors own significant equity in the organization. "A major conflict of interest between top executives and owners, is that top executives wish to diversify the firm in order to ____, while owners wish to diversify the firm to ____. d.Individualism. Combined, the board members held seats on 47 corporate boards in the U.S. across a variety of industries. c. defense tactics vary in their effectiveness as a defense to takeovers.
