Question 1

Please complete the following definition (two missing words): ___________describes the rules, processes and structures through which corporations are directed and controlled in the interests of shareholders and other stakeholders'.

Accepted Answer

Corporate governance

Question 2

According to Shankman (1999), two features make agency relations special. One of these is the inherent conflict of interest between shareholders and managers. What is the other?

Accepted Answer

Informational asymmetry between principal and agent is the other feature that makes agency relations special, as it leads to challenges in ensuring that managers act in the best interests of shareholders.

Question 3

Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity.
-Anglo-American model

Accepted Answer

The Anglo-American model of corporate governance is characterized by dispersed ownership, where individuals, pensions, and mutual funds are the primary shareholders.

Question 4

Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity.
-Rhenish capitalism

Accepted Answer

Rhenish capitalism, often associated with countries like Germany and the Netherlands, is characterized by significant involvement of banks, corporations, and the state in corporate governance.

Question 5

Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity.
-India

Accepted Answer

In India, corporate governance is significantly influenced by families, foreign investors, and banks, which are common ownership identities in the country's corporate sector.

Question 6

Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity.
-China

Accepted Answer

In China, the corporate governance regime is characterized by significant state ownership, along with family and corporate ownership, reflecting the country's unique economic structure and government involvement in business.

Question 7

There are numerous ethical issues around executive pay. Which of these do Crane et al identify as a reason that executive pay touches an ethical chord with the public in many countries?

Accepted Answer

The pay differentials between executives and lower-level employees are often seen as inequitable, raising ethical concerns about fairness and justice in compensation.

Question 8

Ballwieser and Clemm (1999) identify five main problematic aspects of the financial intermediary's job. Which of the following is not one of them?

Accepted Answer

The answer of Ballwieser and Clemm (1999) identify five main...

Question 9

The _______ in a company plays a key role in managing the _______ relationship, as it appoints the CEO, determines their salary and holds their ________ to account.

Accepted Answer

The answer of The _______ in a company plays a...

Question 10

An investment decision that combines the search for financial returns with the achievement of social, ethical, and environmental goals is known as __________

Accepted Answer

The answer of An investment decision that combines the search...

Question 11

Mackenzie (1998) identifies two types of SRI funds. Market-led funds choose the firms to invest in following the indication of the market. Deliberative funds, meanwhile, base their portfolio decisions on:

Accepted Answer

The answer of Mackenzie (1998) identifies two types of SRI...

Question 12

In the Anglo-American and Asian context, the board of directors typically has two-tiers, while in continental Europe a single tier board is the norm.

Accepted Answer

The answer of In the Anglo-American and Asian context, the...

Question 13

Cooperatives are owned and run by their managers.

Accepted Answer

Cooperatives are owned and run by their members, who are typically the customers or employees, not just the managers.

Question 14

Three ethical issues associated with executive pay in firm-shareholder relations are: the issue of designing appropriate performance related pay, the influence of globalization on executive pay and the limited influence of the board in ensuring shareholder interests are championed.

Accepted Answer

These are recognized ethical issues as they relate to fairness, alignment of interests, and governance in executive compensation.

Question 15

According to Crane et al, which of the following is NOT an alternative form of ownership of corporations?
incorrect

Accepted Answer

According to Crane et al., the option that is NOT an alternative form of ownership of corporations is:
d. Limited Liability Corporations (LLCs)
Limited Liability Corporations, or more commonly Limited Liability Companies, are not considered an alternative form of ownership; rather, they are a mainstream form of private sector business ownership. LLCs are a popular choice for businesses because they offer the liability protection of a corporation with the tax benefits of a partnership or sole proprietorship.
The other options listed are considered alternative forms of ownership:
a. State-owned firms are owned and operated by the government.
b. Co-operatives are owned and operated by their members for their mutual benefit.
c. Social purpose corporations are designed to allow for-profit entities to pursue both economic and social objectives.

Question 16

_______ such as Fitch Ratings, and ________ such as Deloitte are charged with providing a _______ and fair representation of the financial position of a large firm.

Accepted Answer

The answer of _______ such as Fitch Ratings, and ________...

Question 17

Crane et al. discuss steps that can be taken to make supervisory, non-executive, board members more independent. Choose all that apply.

Accepted Answer

Crane et al. suggest that to enhance the independence of non-executive board members, they should be appointed independently, sourced from outside the company, and have term limits to prevent entrenchment.

Question 18

The breadth in skills, backgrounds, age, gender, ethnicity and sexual orientation possessed by the non-executive and executive directors of a company is often referred to as?

Accepted Answer

The answer of The breadth in skills, backgrounds, age, gender,...

Quiz 6: Shareholders and Business

Please complete the following definition (two missing words): ___________describes the rules, processes and structures through which corporations are directed and controlled in the interests of shareholders and other stakeholders'.

According to Shankman (1999) , two features make agency relations special. One of these is the inherent conflict of interest between shareholders and managers. What is the other?

Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity. -Anglo-American model

Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity. -Rhenish capitalism

Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity. -India

Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity. -China