b. financial responsibility to employees. What difference can Archibald expect? It would be wrong to say that we are 100% of where we ought to be. 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 d. Banks have less influence on the governance of German corporations than they do on U.S. corporations. b. d. Mr. Abercrombie should find significant need for his services in companies in tran-sitional economies. a. less common than data values close to the mean. c. greenmail. r:r:r: The apartment is hot. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. It is not because companies perform worse after they appoint female directors. c. increased shareholder participation in decision making. A recent study, of board composition and financial data on 1,644 public companies in the United States between 1998 and 2011, finds that companies that appoint women to the board are no more profitable than those that do not. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. Institutional Investors on Boards: Does Their Behavior Influence d. a variety of compensation plans for executives of foreign subsidiaries. What other expenses might it expect? c. reduce the risk of total firm failure, reduce their total portfolio risk And in many cases, this might mean recruiting board members outside of existing networks. Research suggests that the activism of institutional investors such as TIAA-CREF and CalPERS "The argument for having one individual serve as CEO and chairperson of the Board of Directors is that this: In order to limit Mr. Leagreet's power, Board of Directors plans to: c. lobby legislators to pass laws that are aligned with the organization's interests. c. agency d. Firms with higher state ownership tend to have lower market value and more vola-tility in those values over time. d.potential tax burden for. b. financial responsibility to employees. d. tying the compensation of CEOs to measurable financial criteria. MGMT Chapter 10 Flashcards | Quizlet An agency relationship exists when one party delegates The separation between firm ownership and management creates a(n) ____ relationship. d. penalties for inadequate firm performance. c. Membership of U.S. boards of directors is less directly influenced by the company's employees than is the membership of German Aufsichsrat. c. Banks' influence over corporations is increasing. a. making CEOs more accountable for their performance. 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. d. governmental relations. a. firms with unethical top executives The CEO's behav-ior may be indication of b. a standstill agreement. "The separation between firm ownership and management creates a(n) ____ relationship. b. institutional shareholders b. executive compensation that is primarily based on long-term performance. c. safer strategies with more focused diversification for the firm. For instance, they found that boards with diverse directors in key positions tended to perform better, suggesting that there was no quality issue involved in the lack of appropriate representation. c. The CEO/Chairperson of the board has been suspected of opportunistic behavior. d.a poison pill. As a means of increasing profits, IFS has used substandard ingredients in these meals and has consistently lied about this practice during quality investigations by the Marines. d. the board of directors. 2023 Knowledge at Wharton. This seems unlikely. c. the board is homogenous incomposition. "The interests of multinational corporations' shareholders may be best served when there is: Similarly, the relationship of top management team (TMT) gender diversity and company performance is statistically significant but very small. Women board directors are more likely than men to identify social issues like human rights, climate change, and income inequality as critical to corporate strategy. b. "The board of directors of Acme Brands is discussing the design of a very generous stock option plan for its top executives. Implementing a director appraisal system. Post and Byron (2015) found that firms with more female directors tend to have slightly higher accounting returns, such as return on assets and return on equity, than firms with fewer female directors. Another explanation is that investors react to what they perceive to be a change in firm preferences. Diversity advocates often argue that gender-diverse boards make better decisions than all-male boards. a. lead independent I think its also clear to say if youve got the longer-term members that came from the old established approach to the way boards were runthey may just not be quite as supportive in some cases., In boards like these, interviewees said discussing the issues rather that shrinking away from them was of utmost importance. d.outside directors own significant equity in the organization. b. inside What circumstances would most likely have initiated this proposal? Companies that engage in CSR, or intend to do so, may be particularly inclined to appoint women to the board. b. returned to them as dividends. Five or so years after the financial crisis, the pressure on boards and directors to raise their game remains acute. c. the firm's top managers. They also raised. b. banks and other lending institutions that have provided major financing to the firm. b. the board includes employees as votingmembers. Board gender diversity thus explains about 1% of the variance in companies engagement in CSR. d. reduction in R&D expenditure. b. selecting new CEOs. Managers in the U.S. receive ____ compensation than managers in the rest of the world. b. may not have a direct effect on firm performance. a. The board wishes the CEO to take more short-term risks in order to achieve poten-tially higher long-term returns. d. defense tactics make the costs of a takeover lower. a. In other words, investors seem to be penalizing, rather than rewarding, companies that strive to be more inclusive. "Recent research evidence shows that ownership concentration is associated with: a. b. greater managerial autonomy. b. insuring that the strike price value of the options can be lowered if the organizational environ-ment becomes more risky. Here, I dig into the findings of rigorous, peer-reviewed studies of the relationship between board gender diversity and company performance. a. management consultants. They also raised concerns with what they referred to as checking the box initiatives and tokenism for the sake of board diversity. Oh, we have an opening, who do we know? He shared that many times board members only knew people like them. d.For legal reasons, the board cannot consider the interests of CalPERS over the interests of its top executives. b. a number of publicly-traded companies have decided to privatize. b. Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. c. the board is homogenous in composition. d. outside directors own significant equity in the organization. "Compared to managers, shareholders prefer: Besides the name of the director, the press releases were identical. The team members are becoming concerned about the security of their jobs at Sierra Infusion. a. Even if the women named to corporate boards are different from the men on these boards, they may not speak up in board conversations and they may lack the influence to change the boards decisions. In the chapter Strategic Focus, the weakness of corporate boards was exemplified by ___________________. d. reflected in the price of the stock. b. likely to gain financially if their employing firm is taken over by another. Research suggests that boards of directors perform better if a. the CEO is also the chairperson of the board of directors. d. Large institutional investors such as pension funds, and insurance companies are relatively insignificant owners of corporate stock. d. the top management team's interests and the owners' interests are aligned. On more hierarchical boards, the CEO, Chairman, or lead independent director tends to dominate board meetings. "The major determinant of CEO pay is(are): Knowledge at Wharton is an affiliate of the Wharton School of the University of Pennsylvania. d.penalties for inadequate firm performance. Other things being equal, market analysts may, consciously or unconsciously, regard all-male boards as more competent than boards that are more gender-diverse. c. elevation of foreign executive compensation to U.S. levels. the board is homogenous in composition. Klein is also the vice dean of the Wharton Social Impact Initiative. According to the excerpt, how do production processes affect the comparative advantage of the United States? 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. d. has weakened the effect of other governance mechanisms. d.over-valued firms. Given the demands for greater accountability and improved performance, which of the follow-ing is NOT a voluntary change many boards of directors have initiated? 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. By and large, the obverse is true: breaking glass helps firms slightly. c. excessive management compensation. Shareholder value is a. equivalent An executive's decisions often affect firm performance only over the long run. Still, the relationship between gender diversity and accounting returns was tiny. a. usually on the verge of bankruptcy. Can you catch two birds with one stone? The impacts of nominating Boards that want to maximize their effectiveness need to do more to ensure that different perspectives are regularly elicited and integrated into the boards work. One interviewee discussed how this was a particularly challenging dynamic on a board that was resistant to input either from shareholders or board members: There was not a lot of open communication. She shared, I can understand what it means to be a token person. 5 d. of the focus on stewardship-management in German firms rather than the financial performance focus of U.S. firms. d. consulting accounting advisors to make sure that the plan transfers wealth to the CEO without immediately appearing on the balance sheet of CyberScope. b. long-term incentives such as stock options. a. monitoring A majority of the directors are concerned that while Mr. Leagreet has been re-sponsible for the firm's earning above-average returns, he has been displaying a tendency to-ward personal extravagance at the firm's expense. Which of the following statements is about corporate governance in Germany is FALSE? d. The firm is traded on the New York Stock Exchange and must change its corporate governance to comply with the NYSE's new rules. b. appoint another individual as chairperson of the Board of Directors. a. this delays their compensation for present actions to future years. a. increases shareholder value significantly. d.companies in mature, slow-cycle industries. In McKinsey's previous studyconducted with 2014 numbersthat increase had been 35%. d.defense tactics make the costs of a takeover lower. b. strengthens the governance processes of the firm. "The board of directors of CamCell, Inc., wishes to design a CEO compensation plan that will align the personal interests of the CEO with the interests of the shareholders in long-term firm performance. A recent study, of board. d.more variable. c. 50 Some have expressed concern that broadening the definition of diversity, without associated efforts to reduce bias in director selection efforts, could provide firms with an out, effectively allowing them to exclude underrepresented demographic minorities from the board. d.the difference in risk propensity between owners and managers. b. inside d.consulting accounting advisors to make sure that the plan transfers wealth to the CEO without immediately appearing on the balance sheet of CyberScope. d.The firm is traded on the New York Stock Exchange and must change its corporate governance to comply with the NYSE's new rules. Mr. Abercrombie has had striking success in reducing conflict and hostil-ity among directors and allowing boards to develop more cohesiveness. One board member shared: We look at diversity in a lot of different ways experience, age, ethnicity, gender, etc.. Why or why not? This suggests that gender diversity on the board explains about two-tenths of 1% of the variance in company performance. b. requiring that outside directors be former executives of the firm. Write the statements in symbolic form . b. appoint another individual as chairperson of the board of directors. Which of the following is FALSE about corporate governance in China? b. stock brokerage companies. c. having the stock option plan designed by insiders on the board of directors who are familiar with day-to-day operations of the firm. But it would also mean that investors think it is possible for one incompetent female director to drive down the profitability of the company while her male colleagues watch helplessly from the sidelines. There was, however, a difference in the perceived goals of the company. c. compensating directors with stock options rather than with fixed remuneration. d.CEOs and other top executives tend to hold their jobs for five years or less, meaning they are not employed by the firm for the appropriate period of time. a. decision making responsibility to a second party. c. lower But firms expecting a financial performance boost simply by increasing female board representation may end up disappointed. The ownership of major blocks of stock by institutional investors have resulted in all of the fol-lowing EXCEPT We find that companies that appoint women to the board see a decline in their market value for two years following the appointment (after which we no longer see any effect). d.government agencies. a. Complete the following: In small firms, managers often own a ____ percentage of the firm, which means there is ____ separation between ownership and managerial control. Older boards are better boards, so beware of diversity targets Companies with a Digitally Savvy Board Perform Better When and Why Diversity Improves Your Board's Performance b. decreases. b. risk undertaken by managers to earn stock options. a. boards of directors. a. some foreign firms have delisted on U.S. stock exchanges. If the market for corporate control were efficient as a governance device, then only ____ would be targets for takeovers. Couple times it hasnt been but someone will just say, Hey thats not very respectful, you know the way you just said that., Several interviewees told us that boards that value open communication are more likely to engage in conversations about diversity even those that believe they still have a long way to go. a. unsubstantial profits b. headed by outside directors. c. lower levels of product diversification. In sum, the research results suggest that there is no business case for or against appointing women to corporate boards. Boards of directors are now becoming more involved in - Course Hero b. 5. mechanics and neural control of contraction, Information Technology Project Management: Providing Measurable Organizational Value, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine. Combined, the board members held seats on 47 corporate boards in the U.S. across a variety of industries. "The market for corporate control serves as a means of governance when: d. requiring that outside directors be truly objective by having no ownership interest in the firm. 5 The repurchase at a premium of shares of stock that have been acquired by the aggressor firm in a hostile takeover in exchange for an agreement that the aggressor will no longer target the com-pany for takeover is called the CEO is also the chairperson of the board of directors.b. c. defense tactics vary in their effectiveness as a defense to takeovers. Which of the following statements is most likely to be TRUE? a. available to comment to external analysts. Other research has found no relationship to performance at all. c. Employees, union members, and shareholders appoint members to the Aufsichsrat (the supervisory tier of the board). a. d.prevented by the Sarbanes-Oxley Act from owning more than 50% of the stock of any one firm. a. boards of directors. Consensus a. installation of an outsider as the lead director on the Board of Directors. b. the board includes employees as voting members. The average correlation is .15. c. the government. This is because women bring new insights and perspectives and increase the cognitive diversity of the board. The Vorstand (management board) of a German corporation makes decisions about strategy and management. b. company unions which are a type of governance system. The modest size of the positive effects helps explain ambiguity and inconsistency in prior scholarship (past research has been triangulating on a weak signal in a noisy field), and they caution against overclaiming about strong or causally dependable financial benefits (Eagly, 2016). d.Mr. b. We think this happens because female board appointments are anything but gender neutral. Despite the intuitive appeal of the argument that gender diversity on the board improves company performance, research suggests otherwise. Increased regulation in the financial sector has increased the cost of mounting hos-tile takeovers. c. safer strategies with more focused diversifica-tion for the firm. a. People coming from that diverse role I think really does help a board to get better results.. Research Review: Does Gender Diversity on Boards Really Boost Company "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? c. related People believed that the company that appointed Marilyn cared more about improving the social performance of the firm and less about maximizing shareholder value, compared to the company that appointed Jack. b. large institutional investors control large blocks of stock. c. Research shows that once a hostile takeover has been defeated, the firm is safe from other hostile takeover attempts for many years. 25 b. enforcement b. d. risk managers will not find a new top management position if they should be dis-missed. Mr. Abercrombie is con-sidering expanding his consulting practice overseas. How diversity, equity, and inclusion (DE&I) matter | McKinsey Agricultural Chemicals, Inc., was the target of a hostile takeover six months ago. b. the board includes employees as voting members. Which of the following reasons would NOT explain the difficulty of determining appropriate executive compensation? a. significant pay reductions for many corporate CEOs Research suggests that boards of directors perform betterif a. the CEO is also the chairperson of the board ofdirectors. the board is homogenous in composition. Which of the following statements is most likely to be TRUE? On January 1, California law said that all locally headquartered publicly traded companies must have at least one female director by 2020. Annual U.S. beer production data is given below. b. returned to them as dividends. Consequently, the board has decided on an incentive plan that involves payout based on the firm's performance five years in the future. a. management structures related to total quality management systems. a. ATP has been the initiator of several hostile takeovers in the last two years. c. the firm's tax issues. The board has been successful in reducing the percentage of CEO pay that is com-posed of stock options. The best way to get the board to trust the executive team is to keep them involved. b. control b. company unions, which are a type of governance system. "Product diversification provides two benefits to managers that do not accrue to shareholders: ____ and ____. "All of the following statements are TRUE about the use of defense tactics by the target firm during a hostile takeover EXCEPT: d.banks. c. increased shareholder participation in decision making. This plan will be very attractive in luring candidates for the CEO position. a. provides unified leadership and direction for the firm. d.the top management team's interests and the owners' interests are aligned. This may lead to all of the following EXCEPT High-performing boards: What's on their agenda? | McKinsey a. elect an insider as the lead director. Given global interest in the effects of board gender diversity and the availability of abundant data on board gender composition and firm performance, many researchers have investigated the topic. 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. Yet, the answers have not been clear or consistent. d. 75. Ambrose received: Hed speak like, without taking any breaths for two hours on end., But even in hierarchical cultures, the CEO, Chairman, or lead director can help to create a more open communication environment. The CEO's behavior may be indication of: b. increase the price of the firm's stock, increase the dividends paid out from free cash flows Nor do they perform worse.. So, a tiny effect is statistically significant if the sample is big enough.). "Given the demands for greater accountability and improved performance, which of the following is NOT a voluntary change many boards of directors have initiated? We showed them a press release of a fictional company, announcing the appointment of Jack Smith or Marilyn Clark as a new member of the board.
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