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Exam 5: Corporate Governance

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Question 1

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What is corporate governance? Why is it important?

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Corporate governance is the process by w...

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Question 2

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The Sarbanes-Oxley Act of 2002 incorporates the "comply or else" approach to corporate governance.

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The Cadbury report focused on:

Explain the "comply or explain" guideline.Why did the "comply or else" policy come into force?

Why was the "comply or explain" approach to corporate governance problematic?

The involvement of individual shareholders as owners of an organization helps increase the _____ of managers.

Ethical misconduct is possible even if the board of directors passes all the criteria established by Walter Salmon.

Members of the board of directors are not eligible to be a part of the audit committee.

The _____ is elected by the owners to represent their interests in the effective running of a corporation.

Which of the following is true of the "comply or explain" approach to corporate governance?

Independent or outside directors are not eligible to be a part of the compensation committee.

Typically,the compensation package of the CEO and other senior executives consists of a base salary,performance bonus,stock options,and other perks.

The corporate governance committee of a company oversees compliance with the company's internal code of ethics as well as any federal and state regulations on corporate conduct.

The King II report emphasized the need for companies to adopt an exclusive approach to corporate governance instead of an inclusive one.

_____ members of the board of directors hold management positions in a company.

The King II report formally recognized the need to move the stakeholder model forward and to consider a triple bottom line instead of a single bottom line of profitability.

The CRAFTED principles of governance,offered by the European business school INSEAD,recommend creating a culture and climate of consistency in an organization.

The argument in favor of merging the roles of the chairperson of the board and the chief executive officer is one of efficiency.

The primary responsibility of the _____ committee of an organization is to oversee the compensation packages for the senior executives of the organization.

Corporate governance is concerned with how well an organization meets its obligations to its stakeholders.