Below are a number of multiple choice questions relevant to this chapter. There are two to three variations on the same questions. Each question has four options; the correct answer is written in the final column. Some questions are very simple, while others are much more difficult; this should be taken into account when setting quizzes or exams.
For each of the following questions, read each question carefully and then choose the answer you believe is most correct:
Question and options | # | Ans. |
Which of the following comprises part of the nexus of institutions making up corporate governance? a. criminal law b. financial market regulation c. wage regulation d. none of these | 1 | |
The debate concerning corporate governance was initiated by: a. Burt & Means b. Means & Sparks c. Berle & Means d. Bert & Means | 2 | |
The debate about the nature of the corporation was initially dominated by issues of: a. organization and management b. ownership and control c. plutocrats and proletarians d. all of these | 3 | |
How is the problem of ownership and control usually understood? a. as an inability on the part of the owners to check the management of the corporation b. as an inability on the part of trade unions to check the management of the corporation c. as an inability on the part of the managers to manage the corporation d. all of these | 4 | |
What percentage of consolidated share holdings is generally enough to secure control in fragmented shareholding investments in a firm? a. 1% b. 4% c. 10% d. 40% | 5 | |
Which of the following is an influential agenda-setting report on corporate governance? a. the Lindt Report b. the Carnegie Report c. the Bourneville Report d. the Cadbury report | 6 | |
Germany is described as having which corporate governance form? a. shareholder b. stakeholder c. neither shareholder nor stakeholder d. both shareholder and stakeholder | 7 | |
The dominant theory in corporate governance is ______. a. RBV b. KBV c. agency theory d. Marxist theory | 8 | |
Agency theory has which two central actors? a. manager/owner b. principal/agent c. agent/manager d. agent/artist | 9 | |
Which of the following mechanisms are designed to induce managers to maximize stock, and thus shareholder, value? a. linking of CEO and top management team pay b. linking of CEO and top management team pay to share performance c. linking of CEO and top management team pay to innovation d. all of these | 10 | |
The cost of monitoring management is known as ______ in agency theory. a. agency cost b. agency control c. agency effort d. none of these | 11 | |
Effective corporate governance is a major factor in building ______. a. legitimacy b. profits c. market share d. all of these | 12 | |
What is a major problem with agency theory? a. Agency theory is a set of abstractions with little empirical content. b. Agency theory is not part of the RBV. c. Agency theory ignores industry dynamics. d. Agency theory is difficult for institutional investors to apply. | 13 | |
What does the premise of agency theory fail to recognize? a. Shareholdings may be owned by major institutional investors such as pension funds. b. Owners and managers are not sharply separated and distinct entities because firms can grant managers stock options to avoid the so-called agency problem. c. Owners can exert control over management by voting them out. d. all of these | 14 | |
According to research by Parker, boards dominated by their CEOs will be ______. a. stronger b. weaker c. more efficient d. more innovative | 15 | |
Which of the following are problems with boards, according to your textbook? a. ritualism b. training c. concentration of powers d. all of these | 16 | |
According to Pettigrew and McNulty, what effect do norms regarding board conduct have? a. They limit the influence of outsiders to little more than an advisory role. b. They limit attendance at annual general meetings. c. They enable creditors to exert influence over board decision-making. d. They enable part-time board members to exert influence during board meetings. | 17 | |
According to Pettigrew and McNulty, part-time non-executive directors typically play what role? a. giving corporate governance advice to the CEO b. conducting due diligence on company accounts c. initiating strategic proposals to management d. checking strategic proposals put forward by management | 18 | |
What does the ‘small world’ phenomenon mean in relation to corporate governance? a. globalization b. tightly networked boardroom social relations c. that board members come from the same neighbourhood d. none of these | 19 | |
According to Fligstein and Choo, corporate governance systems arise from: a. government choice b. the needs of owners of capital to maximize profit c. political and historical processes d. stakeholder activism | 20 | |
Which of the following is NOT a major model of comparative corporate governance? a. shareholder capitalism b. social capitalism c. stakeholder capitalism d. state capitalism | 21 | |
Which country best exemplifies the shareholder capitalism model? a. United States b. Germany c. Japan d. China | 22 | |
Which country best exemplifies the social democratic stakeholder capitalism model? a. Austria b. Germany c. Japan d. United Kingdom | 23 | |
What is the Mittelstand? a. an area of Germany known for innovation b. a German opera c. the German stock exchange d. none of these | 24 | |
Where would we find Chaebol? a. Germany b. Russia c. South Korea d. Singapore | 25 | |
Where would we expect to find Keiretsu? a. China b. India c. Japan d. Philippines | 26 | |
Keiretsu make up what percentage of listed Japanese companies? a. 10% b. 25% c. 50% d. 75% | 27 | |
What is the name usually given to the rules, values and norms through which governance occurs? a. code of control b. code of corporate citizenship c. the Koranic code a. code of ethics | 28 | |
What does Brunsson find is normal in organizations? a. cheating b. lying c. hypocrisy d. morality | 29 | |
Corporate governance and codes of ethics are intended to ______ organizational members. a. punish b. reward c. discipline d. motivate | 30 | |
What does your textbook think should be the relation between ethics, corporate governance and legal compliance: a. integrated b. clearly separate c. reciprocal d. none of these | 32 | |
According to your textbook, a code of ethics should be developed through: a. adherence to legal obligations b. democratic participation by organizational members c. advice from corporate lawyers d. robust debate at board level | 33 | |
Corporate social responsibility (CSR) has been defined by the European Commission (2005) as existing when: a. Companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis. b. Companies do the right thing. c. Companies maintain their immediate environment in pristine shape. d. all of these | 34 | |
The use of CSR reports by companies to make them ‘look good’ is often referred to as: a. brownwashing b. greenwashing c. greening d. browning | 35 | |
In CSR performance, what is often measured is/are ______. a. perceptions rather than actual performance b. philanthropy rather than actual performance c. ideals rather than actual performance d. ideas rather than actual performance | 36 | |
A socially responsible firm is expected to report a firm’s social performance through: a. audit b. social impact analysis c. social reporting d. all of these | 37 | |
A socially responsible firm should exceed expectations of minimal obligations by: a. going above and beyond what is legally required in positive ways, in terms of worker and community welfare b. hiring more people annually c. increasing salaries d. all of these | 38 | |
According to Banerjee, what should corporate CSR codes include if the firm is to become socially responsible in more than just tokenistic ways? a. extended liability to directors for corporate breaches of environmental and social laws b. rights of redress for citizens and affected communities c. sanctions against corporations for breaching their stated duties d. all of these | 39 | |
According to Banerjee, a socially responsible firm should offer: a. provisions for stakeholders legally to challenge corporate decisions and legal aid mechanisms to provide public funds to support such challenges b. community rights to resources, including indigenous people’s rights over common property such as forests, fisheries and minerals c. veto rights over developmental projects and against displacement d. all of these | 40 | |
Martinuzzi and Krumay define the aim of strategic CSR as the integration of CSR into: a. central business decisions b. central government policy c. corporate governance codes of conduct d. headquarters control of strategic business units | 41 | |