Corporate Governance Exam Questions Henry Ch.11

Chapter 11: Corporate Governance

Test Bank

Type: multiple choice question

Title: Chapter 11 Question 01

1) The form of control that ensures that managers are fulfilling the obligations to the owners of the organization is known as:

a. Corporate governance.

b. Market for corporate control.

c. Regulation.

d. Corporate social responsibility.

Type: fill-in-blank

Title: Chapter 11 Question 02

2) Jonathan Charkham points out, ‘good governance means a proper balance between enterprise and __________________.

Type: true-false

Title: Chapter 11 Question 03

3) For Brandeis (2004), the conferring of corporate status went hand in hand with the needs of public policy and welfare.

a. True

b. False

Type: multiple choice question

Title: Chapter 11 Question 04

4) One of the characteristics of the modern corporation is ‘limited liability’. This means:

a. Shares can be transferred.

b. Separation between the corporation and its owners and employees.

c. The corporation is a legal entity.

d. The corporation has a board of directors.

Type: fill-in-blank

Title: Chapter 11 Question 05

5) The philosophical approach that challenges the shareholder value approach to organizational purpose is called __________________ capitalism.

Type: fill-in-blank

Title: Chapter 11 Question 06

6) Corporate governance is inextricably bound up with one’s views of the _______________ of corporations.

Type: fill-in-blank

Title: Chapter 11 Question 07

7) _________ coined the famous phrase ‘the business of business is business’.

Type: multiple response question

Title: Chapter 11 Question 08

8) American Business Model (ABM), often referred to as the Washington consensus, is based on four claims:

Type: multiple choice question

Title: Chapter 11 Question 09

9) Sir Adrian Cadbury maintains the fact that companies such as the Body Shop demonstrates that not all shareholders are concerned with maximizing profits but also: Please select all that apply.

a. Transparency.

b. Wider objectives.

c. Short-term profit.

d. Long-term profit.

Type: fill-in-blank

Title: Chapter 11 Question 10

10) The separation of ownership from control of a corporation is known as the _____________________ problem.

Type: multiple response question

Title: Chapter 11 Question 11

11) According to R. Edward Freeman, stakeholders are individuals or groups which affect or are affected by the achievement of an organization’s objectives; they may include:

Type: multiple choice question

Title: Chapter 11 Question 12

12) From the Japanese concept of kyosei, a corporation is:

a. Outward looking, aware of its duty to people outside its organization such as customers, suppliers, and the community.

b. A self-sufficient organism set apart from society.

c. Regulated.

d. Able to be profitable and sustainable in the long run.

Type: true-false

Title: Chapter 11 Question 13

13) The Japanese concept of ‘kyosei’ is similar to the ideas in stakeholder theory.

a. True

b. False

Type: multiple choice question

Title: Chapter 11 Question 14

14) An approach which is specifically concerned with the ethical behaviour of organizations towards their internal and external environment is:

a. Corporate Social Responsibility

b. Corporate Governance

c. Moral Philosophy

d. Business policy

Type: multiple response question

Title: Chapter 11 Question 15

15) Which of the following are the views of stakeholder theory? Please select all that apply.

Type: multiple response question

Type: fill-in-blank

Title: Chapter 11 Question 17

17) The Committee on the Financial Aspects of Corporate Governance is commonly referred to as the _______________ Committee.

Type: true-false

Title: Chapter 11 Question 18

18) Corporate governance ensures that managers will not act in their own self-interest.

a. True

b. False

Type: multiple response question

Title: Chapter 11 Question 19

19) Which of the following are recommendations of the Cadbury Committee? Please select all that apply.

Type: true-false

Title: Chapter 11 Question 20

20) The Hampel Committee (1998) was set up to review the Cadbury Report and the Greenbury Report.

a. True

b. False

Type: multiple choice question

Title: Chapter 11 Question 21

21) There has been some concern about the lack of diversity in the boardroom, particularly the under representation of women. Davies Walker recommended reforms to deal with this issue, including: Please select all that apply:

a. FTSE 100 companies should aim for a minimum of twenty-five per cent of women in the board room by 2015.

b. To identify gender discrimination.

c. Extensive reforms to strengthen governance.

d. To equally balance the both genders in the board room.

Type: multiple response question

Title: Chapter 11 Question 22

22) Regarding the role of non-executive directors, the recommendations of the Higgs Report included:

Type: multiple response question

Type: true-false

Title: Chapter 11 Question 24

24) The Sarbanes-Oxley Act was as a result of the collapse of Polly Peck.

a. True

b. False

Type: fill-in-blank

Title: Chapter 11 Question 25

25) The fundamental question arising from the Sarbanes-Oxley Act (2002) was whether we can or should legislate for ___________________.

Type: true-false

Title: Chapter 11 Question 26

26) The Greenbury Report reported on investors’ concerns regarding the role of non-executive directors.

a. True

b. False

Type: multiple choice question

Title: Chapter 11 Question 27

27) Kakabadse and Kakabadse (2002) argue that the corporate governance debate needs to be pursued more at:

a. The societal/political level

b. The shareholders’ level

c. The enterprise level

d. The global level

Type: true-false

Title: Chapter 11 Question 28

28) The proponents of the agency view of business argue that corporate governance only needs to be revised around the edges.

a. True

b. False

Type: multiple response question

Title: Chapter 11 Question 29

29) Proponents of the agency approach consider the stakeholder approach to be problematic because: Please select all that apply.

Type: multiple choice question

Title: Chapter 11 Question 30

30) The Higgs Report was undertaken to investigate:

a. The reasons for the Enron collapse.

b. Control and reporting functions of board of directors and the role of auditors.

c. Executive remuneration.

d. The role and effectiveness of non-executive directors

Type: multiple response question

Title: Chapter 11 Question 31

31) The UK government was forced to use tax payers’ money to bail out failing British banks RBS and Lloyds Banking Group to prevent their collapse. What went wrong with these and similar financial institutions?

Type: true-false

Title: Chapter 11 Question 32

32) For Carrol, for a company to be considered socially responsive it needs to meet some of the four responsibilities (economics, legal, ethical, philanthropic)

a. True

b. False

Type: fill-in-blank

Title: Chapter 11 Question 33

33) To achieve the trade-off between the competing needs of stakeholders, companies should accept the maximization of long-run value of the organization as.