research suggests that boards of directors perform better if

"The major determinant of CEO pay is(are): d. The compensation committee may not have comprehensive firm performance data. Oh, we have an opening, who do we know? He shared that many times board members only knew people like them. There have been many rigorous, peer-reviewed studies of board gender diversity. In order to limit Mr. Leagreet's power, the board of directors plans to a. defense tactics are usually beneficial for the executives of the target firm. d. The CEO was a recipient of the Golden Peacock Award for Corporate Governance. Board diversity matters but concentrating on only one form of diversity isnt enough. c. pressure the board of directors to reprice their stock options. destination. b. internal auditing scrutiny has improved and there is greater trust in financial report-ing. Monitoring by shareholders is usually accomplished through Diversity wins is the third report in a McKinsey series investigating the business case for diversity, following Why diversity matters (2015) and Delivering through diversity (2018). "The board of directors of Acme Brands is discussing the design of a very generous stock option plan for its top executives. However, rigorous, peer-reviewed academic research paints a different picture. You know people listen. b. company unions, which are a type of governance system. James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. a. Satyam's stock price suffered a significant decline. c. reduce the risk of total firm failure, reduce their total portfolio risk Firms should be selecting the very best directors from the largest talent pool possible, and excluding women from that pool to avoid market penalties would be counterproductive. c. Membership of U.S. boards of directors is less directly influenced by the company's employees than is the membership of German Aufsichsrat. b. appoint another individual as chairperson of the board of directors. b. ensure that the interests of top-level managers are aligned with the interests of shareholders. d. The CEO and top executives should not consider their jobs secure. a. management structures related to total quality management systems. shipping point, and $22,000 of goods sold to Alvarez Company for$30,000, f.o.b. One interviewee said, The lead director has a role here to make sure that they invite people in and if somebody is really quiet they should go to that personand make sure they feel comfortable saying anything that they want.. Collegial boards are more likely to accept and integrate differences of opinion. d. outside directors own significant equity in the organization. b. defense tactics are opposed by institutional investors. Corporate governance revolves around the relationship between which two parties? Because women directors tend to be significantly . The fact that two quite distinctive meta-analyses reached nearly identical conclusions carries a lot of weight. d. reflected in the price of the stock. And the greater the cognitive diversity, the better the board is at solving complex problems and coming up with novel solutions. There was, however, a difference in the perceived goals of the company. a. a. Mr. Abercrombie will have a large market in Japan because the culture highly values consensus decision making. "The board of directors of CyberScope, Inc., is designing a stock option plan for its CEO that will motivate the CEO to increase the market value of the firm. a. a. Mr. Abercrombie will have a large market in Japan because the culture highly val-ues consensus decision making. d. the board of directors. This wouldnt be a problem if diversity initiatives were not seen by many investors as little more than costly experiments. b. CamCell may have to over-compensate its CEO in order to offset the personal risk a CEO would undertake under this plan. In this opinion piece, Wharton management professor Katherine Klein summarizes academic research on the topic and discusses the possible reasons and implications for these surprising findings. b. the total revenue of the firm. What amount should Stallman report as its December 31 inventory? b. the board includes employees as voting members. a. Interviewees who felt that their boards reflected this quality explained how all board members were able to speak openly and ask questions at meetings and, in doing so, they felt that all opinions were respected. In the U.S., the fundamental goal of business is to, In the U.S., a firm's key stakeholder(s) is(are) the. Innovation d. encumbered. This is in line with numerous academic studies that have found little to no evidence supporting the idea that board diversity leads to better financial performance. Which of the following is FALSE about corporate governance in China? a. setting the option strike price substantially higher than the current stock price. a. boards of directors. One board member discussed her experience on a board: I do feel Im listened to The CEO makes a big difference in terms of the openness., Similarly, another shared how a different CEO made it easier for board members to access the management team: It starts, again, with the CEO not playing the hierarchical role and saying, You cant talk to one of my VPs unless you come through meSo we had access to the next level of management. b. headed by outside directors. We discovered that firms that had made investments in other diversity initiatives, such as work-life benefits, LGBT policies, and programs to employ disabled workers, suffered a greater stock market penalty for appointing female directors than companies that had no previous track record of promoting diversity. a. making CEOs more accountable for their performance. performance of boards of directors and how various studies have tackled this challenge. As ownership of the corporation is diffused, shareholders' ability to monitor managerial deci-sions c. determined by the size of the firm. a. the number of stockholders and the parties they represent. The separation between firm ownership and management creates a(n) ____ relationship. a. management structures related to total quality management systems. b. firms earning above-average returns c. the corporation has greatly exceeded performance expectations. "Top executives resist tying their compensation to long-term performance of the firm mainly because: One explained that their collegial board culture resulted from information being shared openly, with little back channeling or meeting outside of the formal meeting to raise concerns. a. the director of food service for IFS. c. the firm's top managers. a. installation of an outsider as the lead director on the Board of Directors. d. a poison pill. Writing recently on Huffington Post, for example, one consultant observed the following: Companies with gender-diverse management teams have been proven to consistently perform better and be more profitable than those without them. b. the number of stockholders and total percentage of shares they own. "The New York Stock Exchange requires that the audit committee be: a. this delays their compensation for present actions to future years. Despite the intuitive appeal of the argument that gender diversity on the board improves company performance, researchRead More The women named to corporate boards may not in fact differ very much in their values, experiences, and knowledge from the men.. The ownership of major blocks of stock by institutional investors have resulted in all of the fol-lowing EXCEPT b. accounting firms are forbidden from providing both auditing and consulting services to clients. d. likely to be terminated by the acquiring firm even in a friendly takeover. a. bonuses. c. compensating directors with stock options rather than with fixed remuneration. d. Banks have less influence on the governance of German corporations than they do on U.S. corporations. If so, how and when? d. Firms with higher state ownership tend to have lower market value and more vola-tility in those values over time. In order to limit Mr. Leagreet's power, Board of Directors plans to: And to the extent investors care about shareholder value, they will penalize those companies they suspect are putting other goals first. Which of the following statements is most likely to be TRUE? d. governmental relations. c. remains constant. b. the manager frequently invests in the acquired firm which allows them extensive profits, the manager can frequently buy excess assets divested by the acquired firm b. the board of directors of IFS. This plan will be very attractive in luring candidates for the CEO position. ____ is an important influence in Japanese corporate governance structures. The CEO was involved in overstating company revenues and profits. b. composed solely of outside directors. d.riskier strategies with greater diversification for the firm. c. uncontrollable events may affect the long-term performance of the firm. a. greenmail. Does this mean that we should not promote women to corporate boards? All rights reserved. Historically, ____ have been at the center of German corporate governance structure. Consequently, the board is James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. b. increased diversification of the firm. Accelerate your career with Harvard ManageMentor. c. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities c. not correlated with Our foremost conclusion is that there is no cumulative, zero-order evidence of long-term performance declines for firms that have more females in their upper echelons (as CEOs or TMT members). The CEO of Skyco, a publicly-traded company that has been earning below-average returns, has been publicly criticized by shareholders for persuading the board of directors to give her inter-est-free loans, for having the company purchase and furnish a lavish apartment in Paris for her personal use on her twice-yearly trips there, and for excessive stock options. It signals an end, or at least the beginning of an end, to gender exclusivity in firm leadership. c. the board is homogenous in composition. Given the demands for greater accountability and improved performance, which of the follow-ing is NOT a voluntary change many boards of directors have initiated? d.establishing and using formal processes to evaluate the board's performance. A growing body of research including studies by McKinsey & Company has proven that companies with more women in senior executive and board roles have advantages over those that dont.. b. a poison pill. c. Electing an lead director. If these dynamics occur within corporate boards, boards may not take full advantage of their own cognitive variety. d.For legal reasons, the board cannot consider the interests of CalPERS over the interests of its top executives. b. the manager frequently invests in the acquired firm which allows him or her exten-sive profits, the manager can frequently buy excess assets divested by the acquired firm b. the board includes employees as voting members. And even when individuals who are minorities, tokens, or outliers speak up, the majority group members may discount their views. d.encumbered. c. an increased number of IPOs (initial public offerings) are expected. c. lower levels of product diversification. c. liable for any illegal actions by the top management team. b. large institutional investors control large blocks of stock. c. used to reduce corporate debt. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. a. lead independent "Product diversification provides two benefits to managers that do not accrue to shareholders: ____ and ____. We find that companies are not any less profitable after appointing female directors to the board than they were prior to the appointment. "Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. Researchers interviewed 19 board directors (15 women and four men) to learn whether and how corporate boards were benefiting from diversity. d.the top management team's interests and the owners' interests are aligned. Complete the following: In small firms, managers often own a ____ percentage of the firm, which means there is ____ separation between ownership and managerial control. a. used to diversify the firm. Diversity advocates often argue that gender-diverse boards make better decisions than all-male boards. d.governmental relations. Research following the resource dependence theory generally expects boards to have a positive effect on firm performance by engaging in the resource provision function, as doing so the firms to benefit from directors' human capital and social capital in value creation ( Haynes and Hillman, 2010; Jiang et al., 2020 ). c. elevation of foreign executive compensation to U.S. levels. Mr. Abercrombie has had striking success in reducing conflict and hostil-ity among directors and allowing boards to develop more cohesiveness. c. defense tactics are typically ineffective in deterring the takeover. d. Corporate governance is best achieved with a board of directors with strong ties to management. c. defense tactics vary in their effectiveness as a defense to takeovers. d. 75. b. internal controls have failed. Who is ultimately responsible for the corporate climate that resulted in this wrongdoing? b. risk undertaken by managers to earn stock options. An immense investigative effort has been devoted to these questions: over 140 studies in the past several decades, conducted in dozens of countries, and published in journals from many different disciplines and theoretical traditions. c. often performing above their industry averages. d.the head of contract services for the Marines, Chapter 11: Organizational Structure and Cont, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine, Information Technology Project Management: Providing Measurable Organizational Value, Operations Management: Sustainability and Supply Chain Management, canvas quiz : Blood vessels and circulation. Researchers studied 1,644 public companies. c. public pension funds c. Borders' decision to increase the size of its board 1. c. incentives for International Food Services (IFS) has a contract with the Marines to supply meals for its troops in Iraq and other foreign assignments. 48 c. pressure the board of directors to reprice their stock options. a. some foreign firms have delisted on U.S. stock exchanges. "In the U.S. the fundamental goal of business is to: "In the U.S., a firm's key stakeholder(s) is(are) the: "Which of the following is NOT an internal governance mechanism? c. the qualifications and experience of the CEO. d. a silver handshake. To establish causal effects, you need to conduct a randomized control trial. c. require Mr. Leagreet to personally certify the firm's financial reports. Mr. Abercrombie is con-sidering expanding his consulting practice overseas. d. The CEO and top executives should not consider their jobs secure. A 2015 meta-analysis of 140 research studies of the relationship between female board representation and performance found a positive relationship with accounting returns, but no significant relationship with market performance. a. c. increased shareholder participation in decision making. After all, both male and female board members are likely to be selected for their professional accomplishments, experience, and competence. Indeed, this is what Post and Byrons meta-analysis showed. d. The firing by President Obama of the CEO of General Motors because the board had failed to act in previous years. Usually, large block shareholders are considered to be those shareholders with at least ____ percent of the firm's stock. The problem is that there is scant evidence that women directors are much different from men when it comes to their approach or experiences especially when they have similar educational and professional backgrounds. c. is so aggressive that boards of directors have become overly cautious. The gap between CEO pay and the pay of other top executives at Chromatic was significantly larger than at Pixilair. Agricultural Chemicals, Inc., was the target of a hostile takeover six months ago. d.incentive. Again, we cant know for certain why board diversity doesnt predict company performance, but it seems likely that some of the following factors explain the very weak and mostly non-significant effects: While research indicates that in general male and female adults differ somewhat in their values, experiences, and knowledge (and the differences are not huge), its not clear that male and female board members differ all that much in their values, experiences, and knowledge. All of the following are correct about the chapter Strategic Focus on fraud and corporate gov-ernance failure at Satyam Computer Services Ltd. c. the banks owing the largest shares of stock in the firm. d. requiring that outside directors be truly objective by having no ownership interest in the firm. d. tying the compensation of CEOs to measurable financial criteria. "Research suggests that the activism of institutional investors such as TIAA-CREF and CalPERS: b. institutional shareholders An agency relationship exists when one party delegates the board includes employees as voting members.c. Yet, the answers have not been clear or consistent. "Which of the following reasons would NOT explain the difficulty of determining appropriate executive compensation? For example, a few years ago, Apples shareholders voted against recruiting more minorities to its top management team, after the company argued that such a measure would be overly restrictive. They prefer to start from a position of trust. r:r:r: The apartment is hot. a. the strategic decision making process. b. financial responsibility to employees. b. large institutional investors control large blocks of stock. b. the board includes employees as voting members. b. a. d. made up of CPAs with auditing experience. This may lead to all of the following EXCEPT c. is so aggressive that boards of directors have become overly cautious. c. A number of factors intervene between top-level management decisions and firm performance (e.g., unpredictable economic, social, or legal changes). a. increased diversification of Sierra Infusion. "The use of excessively-generous stock options for executive compensation has been slowed in the past couple years for all of the following reasons EXCEPT: "Archibald Smith has moved from an upper-middle management job at Chromatic Array, Inc., to a similar position with Pixilair Corporation. b. organizational size. the CEO is also the chairperson of the board of directors.b. d. always outperforming their industry. b. risks borne by c. the corporation has greatly exceeded perform-ance expectations. a. safer strategies with greater diversification for the firm. c. managers' risk of job loss, loss of compensation, and/or loss of reputation. Research suggests that firms with ____ perform better, especially when collaboration among top management team members is important. a. banks "A major conflict of interest between top executives and owners, is that top executives wish to diversify the firm in order to ____, while owners wish to diversify the firm to ____. A virtually exclusive reliance on financial controls may occur when outsider-dominated boards exist. a. the firm is overpriced in the market. c. an increased number of IPOs (initial public offerings) are expected. An executive's decisions often affect firm performance only over the long run. The Vorstand of a German corporation makes decisions about organization direction and management. What difference can Archibald expect? Companies that engage in CSR, or intend to do so, may be particularly inclined to appoint women to the board. c. Employees, union members, and shareholders appoint members to the Aufsichsrat (the supervisory tier of the board). "As ownership of the corporation is diffused, shareholders' ability to monitor managerial decisions: The authors conclude the following: Undoubtedly, breaking the glass ceiling matters. a. moving toward having directors from different backgrounds These dynamics appear to shape whether diversity on the board actually matters to the boards work. d. Large institutional investors such as pension funds, and insurance companies are relatively insignificant owners of corporate stock. d. greater concentration on Sierra's core industry. It would be wrong to say that we are 100% of where we ought to be. b. strengthens the governance processes of the firm. c. excessive management compensation. b. the board includes employees as votingmembers. b. positively related to c. remains constant. a. a uniform compensation plan for all corporate executives, U.S. and foreign alike. Mr. Abercrombie is considering expanding his consulting practice overseas. Innovation a. She shared, I can understand what it means to be a token person. But are investors walking the walk on board diversity? The argument that gender diversity on the board will improve company performance rests on the assumption that the addition of one or more women to an all-male board will increase the boards cognitive variety because women the argument goes differ from men in their values, experiences, and knowledge. It is not because companies perform worse after they appoint female directors. When they argue, they do it in a pretty much respectful way. b. c. The CEO/Chairperson of the Board has been suspected of opportunistic behavior. The governance mechanism most closely connected with deterring unethical behaviors by hold-ing top management accountable for the corporate culture is a. lead independent d. The firm is traded on the New York Stock Exchange and must change its corporate governance to comply with the NYSE's new rules.

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