Question 1

Catalyst-level board of directors typically

Accepted Answer

Catalyst-level board of directors play a leading role in establishing and modifying the company mission, objectives, and strategy. They have a greater level of involvement in decision-making compared to limited involvement boards. Additionally, they are held to a greater degree of legal responsibility. There is no evidence to suggest that they experience more financial success.

Question 2

Which of the following statements is true regarding the board of directors?

Accepted Answer

All of the statements are true regarding the board of directors. The board has a legal obligation to act with due care, and if they fail to do so and harm the corporation, they can be held personally liable. Additionally, many boards require director liability insurance to attract qualified candidates, and directors must consider the needs of various constituent groups to balance their interests.

Question 3

A benefit of the increased disclosure requirements of the Sarbanes-Oxley Act has been more reliable corporate financial statements.

Accepted Answer

The increased disclosure requirements of the Sarbanes-Oxley Act have led to greater transparency and accountability in corporate financial reporting, which has improved the reliability of financial statements.

Question 4

More than ________ of outside directors surveyed that they had been named as part of a lawsuit against the corporation.

Accepted Answer

According to the information given in the sentence, the percentage of outside directors surveyed who had been named as part of a lawsuit against the corporation is unspecified, but the strongest option listed is 40%.

Question 5

Society increasingly expects corporate boards to balance the economic goal of profitability with the social needs of society.

Accepted Answer

This statement is true. With growing awareness and concern about social and environmental issues, stakeholders including consumers, investors, and governments are expecting companies to prioritize social responsibility alongside economic success. Corporate boards have a responsibility to consider and balance these competing needs.

Question 6

Jeff Bezos, CEO of Amazon.com, uses the S team to engage in continuous strategic planning.

Accepted Answer

Jeff Bezos is known for his use of the "S team," a group of senior executives at Amazon, to engage in continuous strategic planning and decision-making.

Question 7

Transformational leaders transform their organizations from market leaders in one industry to market leadership in another.

Accepted Answer

The answer of Transformational leaders transform their organizations from market...

Question 8

The role of the board of directors in the strategic management of the corporation is likely to be less active in the future.

Accepted Answer

The role of the board of directors in the strategic management of the corporation is becoming increasingly important as corporations face more complex challenges and require more guidance and oversight to achieve their strategic goals. Directors are responsible for setting the overall strategic direction of the corporation, monitoring performance, and providing guidance and direction to management. They play a critical role in ensuring that the corporation is managed in the best interests of its shareholders and stakeholders, and that it is positioned to succeed in the long term.

Question 9

From the perspective of the public, the primary job of the board of directors is

Accepted Answer

The primary job of the board of directors, from the perspective of the public, is to closely monitor the actions of management. This is because the board is responsible for overseeing the company's overall strategy and ensuring that it is acting in the best interests of shareholders and other stakeholders. This includes making sure that management is making sound decisions and operating the company effectively and ethically. The board is also responsible for holding management accountable for any actions that may negatively impact the company or its stakeholders.

Question 10

The relationship among the board of directors, top management, and shareholders is referred to as

Accepted Answer

Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. It includes the relationships among the board of directors, top management, and shareholders, as well as the goals for which the corporation is governed. Therefore, choice C is the best answer.

Question 11

Usually, the strategic planning staff is charged with supporting only top management in the strategic planning process.

Accepted Answer

Strategic planning staff often supports not only top management but also various levels of the organization in the strategic planning process, facilitating coordination and communication across different departments and teams.

Question 12

A highly involved board does all of the following EXCEPT

Accepted Answer

The statement "manage the every day operations of the organization" is not a characteristic of a highly involved board. The board's role is to provide strategic direction and oversight, not to manage day-to-day operations.

Question 13

The confidence levels of executive leaders may blind them to information that is contrary to a decided course of action; this may help to understand why overconfident CEO's are more likely to conduct mergers and acquisitions.

Accepted Answer

Research has shown that overconfident CEO's are more likely to conduct mergers and acquisitions and may ignore information that contradicts their preconceived plans.

Question 14

Executive leadership is the directing of activities toward the accomplishment of corporate objectives.

Accepted Answer

Executive leadership involves setting direction and guiding the activities of an organization in order to achieve its goals and objectives.

Question 15

The requirements of a board of directors vary significantly by country and by state; however, there is a developing consensus as to what the major responsibilities should be.Which of the following is NOT one of the responsibilities?

Accepted Answer

The board of directors is responsible for setting the strategic direction of the company and overseeing its implementation, but they are not responsible for becoming directly involved in managerial decisions. That responsibility falls to top management.

Question 16

Which of the following is NOT a task of the board of directors in strategic management?

Accepted Answer

Implementing strategies is typically the task of management, not the board of directors. The board's role is to initiate and determine strategic direction, monitor progress, influence decision-making, and evaluate performance.

Question 17

The ________ boards typically never initiate or determine strategy unless a crisis occurs.

Accepted Answer

The term "rubber stamp" implies a lack of independent decision-making and simply approving decisions made by others. Therefore, if a board is described as a rubber stamp, it suggests that they do not typically initiate or determine strategy but rather just approve or reject proposals put forward by executives or management.

Question 18

A careless director or directors can be held personally liable for harm done to the corporation if they failed to act with

Accepted Answer

Directors have a duty of care to act in the best interest of the corporation and its shareholders. They must exercise due care and diligence when making decisions, and failure to do so may result in personal liability for any harm caused to the corporation. Codetermination, figurehead role, cumulative voting are not related to the duty of care of directors. Accountability is relevant, but due care is a more specific and appropriate term in this context.

Question 19

The SEC requires that nominating and compensation committees are staffed entirely by outside directors.

Accepted Answer

The SEC requires that the nominating and compensation committees of publicly traded companies be composed entirely of independent directors, who are identified as those who have no material relationship with the company or its management. These independent directors are considered to be "outside" directors because they are not employees of the company. This requirement is intended to ensure that these committees act in the best interests of the shareholders and that their decisions are not influenced by management's interests.

Question 20

The combined chair/CEO position is being increasingly criticized because of the potential for conflict of interest.

Accepted Answer

The statement is true. The combined chair/CEO position means that one person has both the responsibility of leading the board of directors and running the day-to-day operations of the company, which can create conflicts of interest.

Quiz 2: Corporate Governance