Deck 11: Responsible Ownership and Governance

Question 1

A(n)______includes the processes,structures,and relationships through which decisions are made.

A)corporate agenda
B)governing system
C)income trust
D)structural program
E)board of directors

Answer 1

governing system

Question 2

Mohammad is purchasing shares on the Toronto Stock Exchange.He purchases shares that allow him voting rights within a corporation.Voting privileges in this corporation are allocated based on a formula of one vote per 100 shares.As owner of 1000 shares,he has 10 votes.Mohammad purchased:

A)restricted shares
B)non-voting shares
C)mutual funds
D)public equity
E)dual-class stock

Answer 2

A

Question 3

Milton is responsible for administering a very large mutual fund's investment in a technology company.He carefully scrutinizes the company's acquisitions and a recent Take-over bid,however,he does not ever become involved in the day-to-day management of the company,preferring to just sit back and let the managers do their job.The mutual fund is _________shareholder in this example.

A)a passive
B)a minority
C)both passive and active
D)a majority
E)an active

Answer 3

an active

Question 4

Accountability problems which exist in government-owned corporations include all of the following,except:

A)Measurement through commercial criteria.
B)Government objectives may conflict with social objectives in the national interest.
C)Inappropriate social and environmental responsibilities.
D)Degree of autonomy of the corporation.
E)Techniques for controlling commercial corporations.

Question 5

Ownership in _______is based on the principle that one member has one vote,and each member contributes the same amount of equity.

A)Venture capital firms
B)Public corporations
C)Cooperatives
D)Private equity firms
E)Mutual funds

Question 6

Having developed a prototype of his new lawnmower,John is attempting to acquire sufficient capital to market his product.In exchange for a majority ownership of his company,John receives two million dollars from an investment group in Brampton to provide the income to launch this endeavour.The investor's group is an example of a(n)________

A)venture capital company
B)mutual company
C)labour supported investment fund
D)income trust
E)private equity firm

Question 7

Ownership via _______appeals to some investors as it allows them to participate in the stock market without having to make separate decisions about each purchase or sale of stocks.

A)preferred shares
B)mutual funds
C)private equity
D)common shares
E)venture capital

Question 8

The Canadian Museum of Civilization,located in Ottawa,is a crown corporation that has developed a strong reputation for quality cultural displays.Increasingly,Crown corporations are expected to be "increasingly accountable" for their performance.There is concern from some patrons that there will be an attempt to shift managerial control from the curators.This is an example of which dimension of the "accountability
Dilemma" raised by Sexty?

A)Techniques of measurement
B)Concerns regarding commercial criteria being employed
C)Autonomy by the corporation
D)Commercially oriented objectives may conflict with social objectives
E)Limited accountability

Question 9

When did corporate governance become an issue in the media?

A)1980s
B)2013
C)1940s
D)1990s
E)It is not an issue in the media.

Question 10

is a term used to describe employee ownership as workers are turned into capitalists through stock ownership.

A)Concentrated capitalism
B)Active capitalism
C)Consumerism
D)Worker capitalism
E)Passive capitalism

Question 11

Which of the following factors are not included as part of governance?

A)Disclosure of restricted shares
B)Access to relevant corporate information
C)Share in profits
D)Transferring ownership
E)Voting in shareholder meetings

Question 12

Some researchers argue that there is no such thing as socially responsible investment.Their arguments include all of the following,except:

A)Growth in such investments has only been reasonable.
B)No coherent case has been made for social responsibility causing social change.
C)Claims as to the growth in impact returns for such investments are questionable.
D)Data used by those who argue for its existence is not highly selective.
E)Data by those who argue for the existence is not completely objective.

Question 13

Which of the following terms describes the responsibilities toward owners?

A)Shareholder Diplomacy
B)Majority Rule
C)Stakeholder Superiority
D)Shareholder Legitimacy
E)Shareholder Democracy

Question 14

Which of the following statements is not true regarding responsible investing?

A)If all the criteria for socially responsible investment had to be met,there would be few investments.
B)Responsible investing is shifting the way many businesses conduct their affairs.
C)There are stock indices that measure the return on socially responsible investments specifically.
D)Responsible investing means never investing in questionable regimes.
E)Society's standards change; what is ethical now may not be ethical in ten years.

Question 15

Acts which may be considered unethical in terms of responsible investing criteria include all of the following,except:

A)Funds which are balanced investments
B)Animal product testing
C)Gambling
D)Manufacturing weapons
E)Failure to promote affirmative action programs

Question 16

are those who participate in the governance to the full extent allowed by the law.

A)Restricted-shares
B)Active shareholders
C)Dual-class stock
D)Worker capitalism
E)Passive shareholders

Question 17

Jane is concerned.Her company is in desperate need of a cash infusion; she is also on the verge of labour problems and needs some support.She had a lunch meeting with Robert,who represents a potential investor.The idea is that Robert's firm would acquire partial ownership of Jane's company in return for financial investment.Jane is also pleased that Robert's firm will also provide her with managerial assistance.Robert's firm is best
Characterized as a______which is a type of______.

A)venture capital company; private equity firm
B)labour supported investment fund; pension fund
C)labour supported investment fund; private equity firm
D)venture capital company; pension fund
E)private equity firm; sovereign wealth fund

Question 18

Corporate governance involves all of the following,except:

A)internalities
B)resources
C)monitoring and overseeing the strategic direction
D)overseeing the cultural and socio-economic contexts
E)constituencies of the institution

Question 19

All of the following protect the rights of owners,except:

A)Governments
B)Individual activists
C)Community activists
D)Self-regulatory agencies and organizations
E)Industry associations

Question 20

manage large pools of money acquired from wealthy individuals or families and big institutions such as pension and mutual funds.

A)Private equity firms
B)Public share cooperatives
C)Non-profit philanthropists
D)Corporate ethics officers
E)Worker capitalists

Question 21

Active shareholders have limited influence regarding corporate social responsibility issues.

Question 22

There are many influential stakeholders in a corporation,but corporations ultimately exist to serve the shareholders.

Question 23

Credit Union Central of New Brunswick provides financial services to its customers,who are owner-members.This credit union is a cooperative form of ownership.

Question 24

The creation of restricted shares allows management or majority owners to control the corporation by concentrating voting power in the hands of a few friendly shareholders.

Question 25

In terms of the Board of Directors,which of the statements is incorrect?

A)They are not required to provide shareholders with an auditor's statement.
B)They must ensure continuity and succession in the management team.
C)They monitor and evaluate corporate performance.
D)Their role includes fiduciary duties.
E)They have the power to terminate the CEO.

Question 26

Venture capital companies usually acquire part ownership of business enterprises for which they provide financial and management assistance.

Question 27

Owners of restricted shares do not have voting rights.

Question 28

Due to improvements in good governance,Boards of Directors tend to do all of the following,except:

A)Hire their own experts
B)Use more outside directors
C)Meet more often
D)Seek more qualified directors
E)Meet with management present

Question 29

Many corporations operate with dual-class stock,where more than one type of share or stock with different voting rights and dividend payments is issued by a single corporation.

Question 30

Non-voting shares or restricted shares are also referred to as "common" shares.

Question 31

Directors must ask several questions regarding the corporation's ethics management. These questions include all but one of the following.Which is not one of the key questions?

A)What does civil society activity ask of managers?
B)Can people recognize and resolve moral dilemmas?
C)Who is responsible for ethics?
D)Do we punish ethical integrity?
E)What is the company's strategy to manage ethics?

Question 32

Boards are paying more attention to CSR because of:

A)Less investor interest
B)Increased trust
C)Non-profit activism
D)Civil society activity
E)Less globalization

Question 33

Which of the following is considered an independent director for ABC Corp who manufactures plastic components?

A)Professional advisors
B)Family members
C)Current executives
D)The CEO
E)The President of a local college

Question 34

WestJet,a major Canadian airline,features its employees on its television advertising using the tagline: "Why do WestJeters care so much? Because we're also WestJet owners." This model of corporate ownership is referred to as worker capitalism.

Question 35

Private equity firms manage large pools of investment funds which come from large institutional investors rather than individual investors.

Question 36

Passive shareholders are typically owners of a small amount of shares holdings.

Question 37

Canadian federal,provincial,and municipal governments all operate a large number of business enterprises,usually referred to as Crown Centres.

Question 38

Directors may be evaluated in terms of all of the following,except:

A)Resource activity
B)Strategy
C)Shareholder interests
D)Control
E)Service

Question 39

Active shareholders are those who do not attempt to influence the affairs of the corporation even though they have a legal right to do so.

Question 40

Dual-class stock allows an individual to simultaneously purchase shares in two different categories of business.

Question 41

The role of the board of directors includes fiduciary duties to shareholders.

Question 42

The Alzheimer's Society serves individuals and family members affected by this challenging disease.As a non-profit organization,however,it is not considered a business enterprise in Canada.

Question 43

Corporate governance has changed,evidenced by the inclusion of stakeholders in the definition.

Question 44

Ahmed has decided that he wants to have more direct influence over a particular company's social responsibility endeavours.Although his funds are limited,he purchases a small number of shares in the corporation.Individual,direct ownership of a firm through share purchase is a powerful mechanism for influencing a firm's social responsibility practices.

Question 45

Shareholder democracy is the exercise of power by owners to ensure that they are treated fairly and enjoy equally the privileges and duties of ownership.

Question 46

The TSE is the largest stock exchange in Canada and is a self-regulatory agency.

Question 47

Cooperatives have failed to become in institutionalizing ethics and responsibilities.

Question 48

Isaiah is new to investment.Having taken classes on social responsibility,Isaiah has decided to purchase stock in order to influence business practice.Purchasing either type of dual-class stock will allow him to exercise greater voting privileges.

Question 49

Shareholders of an organization influence,and are influenced by,the actions of other stakeholders.

Question 50

Responsible investing refers to the screening of investment decisions for social or ethical measures,rather than economic measures.

Question 51

The best-of-sector approach compares and ranks corporations within an industry.

Question 52

Shareholder democracy is the requirement that every stockholder has equal voting rights when selecting the Board of Directors.

Question 53

Corporate governance is the processes,structures,and relationships through which the shareholders,as represented by a board of directors,oversee the activities of the corporation.

Question 54

Responsible investments only contain stocks of publicly traded corporations.

Question 55

The total level of investment in "responsible funds" is large,compared to that invested in the overall mutual funds market.

Question 56

Investment Industry Regulatory Organization of Canada (IIROC)-IIROC is the national self-regulatory organization that oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.

Question 57

Decisions on responsible investment usually use three possible approaches: positive screening,negative screening,or best-of-sector.

Question 58

At an international level,the inclusion of stakeholders in the definition of corporate governance was an important step but has not been accepted by the OECD.

Question 59

The Canadian financial community has not yet responded to the growing awareness of and demand for socially responsive investments.

Question 60

The accountability for economic,social,and environmental responsibilities has become common among publicly traded corporations.

Question 61

There are dangers associated with excessive governance as it causes managers to be overly cautious,more risk adverse,and diminishes innovation.

Question 62

How does the creation of restricted shares contradict the tenant that ownership in a corporation implies control?

Question 63

Directors have become overseers of CSR and ethical conduct.

Question 64

Lawyers who are directors of a corporation are considered independent.

Question 65

Describe the structure of a board of directors.

Question 66

Corporate governance practices have come under increasing scrutiny and owners pressure the corporation's main governing body,the board of directors,to address corporate responsibility and sustainability challenges.

Question 67

The CEO pay ratio is the ratio of the compensation of the corporation's chief executive officer (CEO)to the median compensation of its employees.

Question 68

An audit committee comprises members of the board of directors and oversees the internal and external accounting auditing function to ensure that financial statements accurately and appropriately represent the condition of the corporation and that regulated disclosures are made.

Question 69

The role of a board member is to monitor and evaluate the corporation's activities and performance.

Question 70

Is there a requirement insofar as the number of independent directors is concerned when forming a Board of Directors for a Canadian corporation? Explain.

Question 71

Evaluate the following statement: Ownership of one share means one vote.

Question 72

About 20 percent of the directors of Canada's largest corporations are women.

Question 73

Describe two self-regulatory agencies and organizations.

Question 74

Most boards comprise 50 to 100 members who serve on various committees.

Question 75

How has Mountain Equipment Co-op implemented ethics and integrity into their business model?

Question 76

When,and under what circumstances,did corporate governance become an issue with the media?

Question 77

Corporate governance experts and regulatory bodies recommend that different persons occupy the positions and that an independent director act as chair.

Question 78

Securities regulation shields top executives of publicly traded corporations from having to disclose their compensation.

Question 79

Compare and contrast passive stakeholders with active stakeholders.