Question 1

The passive board is also called the rubber stamp board.

Accepted Answer

The term "passive board" is often used to describe a board of directors that simply approves decisions made by the company's management without providing much input or challenge. This is sometimes pejoratively referred to as a "rubber stamp board".

Question 2

An intervening board allows the CEO and the top management team to take all the major decisions.

Accepted Answer

An intervening board is a board of directors that oversees the actions of top management but doesn't allow them to make all major decisions. The board serves as a check and balance system to ensure the company is being run properly and in the best interest of stakeholders.

Question 3

All of the outside board members should meet at least once a year without the presence of the CEO.

Accepted Answer

It is recommended that outside board members meet at least once a year without the presence of the CEO to ensure open discussion and evaluation of the CEO's performance and the overall functioning of the organization. This allows for honest and constructive feedback and helps maintain the independence of the board.

Question 4

When the CEO is also the chairman of the board, it is called CEO duality.

Accepted Answer

CEO duality occurs when the CEO also serves as the chairman of the board.

Question 5

In a short essay, list and discuss the six core ethical values that are recommended to guide the behavior of board members.

Accepted Answer

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Question 6

Research has found that there is a direct relationship between CEO compensation and the financial performance of the firm.

Accepted Answer

Research on the relationship between CEO compensation and the financial performance of firms shows mixed results. While some studies find a positive correlation, suggesting that higher CEO pay is associated with better company performance, other studies find weak or no significant relationship, indicating that the link is not as direct or consistent as previously thought. Factors such as company size, industry, and governance structures can influence this relationship.

Question 7

The certifying board actually makes the key decisions for the firm, and the top-level management is responsible for implementing the board's decisions.

Accepted Answer

The certifying board may make important decisions and recommendations, but the top-level management is ultimately responsible for making key decisions for the firm and implementing them.

Question 8

In a short essay, describe the following types of leaders based on the combination of moral person and moral manager scenarios: (a) unethical leader, (b) ethical leader, (c) hypocritical leader, and (d) inconsistent leader.

Accepted Answer

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Question 9

The operating board actually makes the key decisions for the firm, and the top-level management is responsible for implementing the board's decisions.

Accepted Answer

The operating board, also known as the executive board or management board, holds the highest level of decision-making authority in a firm. The top-level management is responsible for implementing the decisions made by the board.

Question 10

In a short essay, discuss corporate governance.

Accepted Answer

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Question 11

The Securities and Exchange Commission in 2004 proposed a code of disclosure that excluded the compensation for the chairman of the board.

Accepted Answer

The Securities and Exchange Commission (SEC) has consistently aimed to increase transparency in corporate governance, including the disclosure of executive and chairman compensation.

Question 12

In a short essay, describe and evaluate Strebel's contingent perspective of corporate governance.

Accepted Answer

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Question 13

In a short essay, define and describe ethical leadership.
a. Ethical leadership is the demonstration of normatively appropriate conduct through personal actions and interpersonal relationships and the promotion of such conduct to followers through two-way communication, reinforcement, and decision making. Ethical leadership is the driving force for a firm to have a positive ethical climate with its employees. With a positive ethical climate, employees have a supportive work environment, which leads to higher commitment and job satisfaction of the employees. Ethical leadership reinforces the beliefs of social learning theory that suggests that when the firm has role models for the employees, the employees will try to copy the behavior of the role models.
Ethical leadership is demonstrated in the leader's various actions. The ethical commitment of the leader affects the leader's character, which influences the leader's motives and influences strategies.
b. Ethical leaders are effective, credible, and legitimate role models to their subordinates. In addition, ethical leaders present a powerful and salient ethical message to subordinates through effective communication and reinforcement. Leaders influence the attitudes, beliefs, and behaviors of employees through either the transactional or the transformational leadership style.

Accepted Answer

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Quiz 5: Ethical Leadership and Corporate Governance