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. c. Electing an lead director. a. Mr. Abercrombie will have a large market in Japan because the culture highly val-ues consensus decision making. a. governance a. high executive turnover. "The board of directors of CamCell, Inc., wishes to design a CEO compensation plan that will align the personal interests of the CEO with the interests of the shareholders in long-term firm performance. a. risk that managers will behave opportunistically. c. strategy implementation actions to functional managers. a. greater emphasis on stock options b. larger proportion of insiders on the board of directors c. smaller pay gap between the CEO and other top executives d. benchmarking used for top executive pay C d.The compensation committee may not have comprehensive firm performance data. And, finally, even if the addition of women to corporate boards does improve cognitive variety and decision making, companies may only see benefits to their accounting performance (their sales, profits, return on assets, for example) not their market returns. Who is ultimately responsible for the corporate climate that resulted in this wrongdoing? a. the roles of CEO and chairperson of the board of directors are usually combined. d. banks. d. the difference in risk propensity between owners and managers. "Which of the following is TRUE of trends in Japan's corporate governance structure? 5. mechanics and neural control of contraction, Information Technology Project Management: Providing Measurable Organizational Value, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine. a. the firm's free cash flow. a. increased diversification of Sierra Infusion. The CEO and the top executives successfully fended off the takeover and are concentrating on strategies to improve the performance of the firm. The team members are becoming concerned about the security of their jobs at Sierra Infusion. What difference can Archibald expect? a. Idea diversity is also important., To offset these concerns, some boards are ensuring that skills and expertise, along with demographics, are front and center in their recruiting processes. b. increase the price of the firm's stock, increase the dividends paid out from free cash flows "Usually, large block shareholders are considered to be those shareholders with at least ____ percent of the firm's stock. Consensus There have been many rigorous, peer-reviewed studies of board gender diversity. According to a 2016 Bloomberg analysis, five of the biggest U.S. activist funds had succeeded in getting over 100 board members appointed in the previous five years. Board Diversity, Firm Risk, and Corporate Policies Mary-Hunter (Mae) McDonnell is an assistant professor of management at the Wharton School of the University of Pennsylvania where she conducts research on the topics of non-market strategy and corporate governance. a. the strategic decision making process. Despite popular press accounts that suggest that teams high in gender diversity outperform those composed only of men or only of women, rigorous research does not support this conclusion. Increased regulation in the financial sector has increased the cost of mounting hos-tile takeovers. Cultivate trust and encourage the board to be involved in strategy. b. long-term incentives such as stock options. 47; Gender-diverse boards also tend to adopt more progressive organizational management practices, such as work-life support programs, which increase employee satisfaction. b. a. used to diversify the firm. d.made up of CPAs with auditing experience. Some major Japanese firms are bringing in more outsiders onto their boards of directors. c. increased shareholder participation in decision making. b. the board includes employees as voting members.c. a. Many of our interviewees suggested that their boards had made progress on gender diversity but not on other forms of social diversity such as race, nationality, and age. a. this delays their compensation for present actions to future years. 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). Post and Byron (2015) found that firms with more female directors tend to have slightly higher accounting returns, such as return on assets and return on equity, than firms with fewer female directors. b. institutional shareholders c. pressure the board of directors to reprice their stock options. a. determine and control the strategic direction of an organization, so that the top executives are focused on maximizing corporate profits. "The board of directors of Acme Brands is discussing the design of a very generous stock option plan for its top executives. d.has weakened the effect of other governance mechanisms. Our interviewees suggested that social diversity (e.g., gender, race/ethnicity, and age diversity) and professional diversity are both important for increasing the diversity of perspectives represented on the board. Hed speak like, without taking any breaths for two hours on end., But even in hierarchical cultures, the CEO, Chairman, or lead director can help to create a more open communication environment. b. the board includes employees as voting members. Nor are they any less profitable, for that matter. Activist shareholders are not necessarily more convinced about diversity being a source of value creation. HBR Learnings online leadership training helps you hone your skills with courses like Diversity, Inclusion, and Belonging. "Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. "Managerial employment risk is the: b. defense tactics are opposed by institutional investors. Similarly, the relationship of top management team (TMT) gender diversity and company performance is statistically significant but very small. a. firms with unethical top executives c. Banks' influence over corporations is increasing. b. free cash flows b. the board of directors of IFS b. defense tactics are opposed by institutional investors. c. large block shareholders such as mutual funds and pension funds. a. management structures related to total quality management systems. We showed them a press release of a fictional company, announcing the appointment of Jack Smith or Marilyn Clark as a new member of the board. The Vorstand is elected by the firm's employees. 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? c. often performing above their industry averages. This may lead to all of the following EXCEPT a. small; small In the U.S., the fundamental goal of business is to, In the U.S., a firm's key stakeholder(s) is(are) the. y=2x+8;y=12;1x2. German executives are not dedicated to the maximization of shareholder value largely because: a. reasonably compensating a CEO. d.is eliminated. One interviewee talked about the importance of respectful disagreement, acknowledging mishaps in communication, and in valuing different perspectives: I havent had anybody shut me down or shut other people down. a. high executive turnover. 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. Working in a group, discuss how the New Therapy Company can meet the deadline and still ensure a high quality of care. d. the number of outside directors and total percentage of shares they own. Usually, large block shareholders are considered to be those shareholders with at least ____ percent of the firm's stock. Consider two recent meta-analyses that have been conducted to summarize prior research on the topic. Increases in board diversity may signal to investors that the firm is motivated by social goals and cares less about maximizing shareholder value. 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. b. control c. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. The chapter Opening Case suggests that ___________ is (are) frequently blamed for high CEO pay during periods where corporate performance has been poor. c. greenmail. d.This type of plan is likely to cause the CEO to underinvest in R&D in order to boost CamCell's long-term profitability. Why Investors React Negatively to Companies That Put Women on Their Boards 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. a. shareholders in the large institutional firms listed on the New York Stock Exchange. b. institutional shareholders b. more common than data values close to the mean. c. Research shows that once a hostile takeover has been defeated, the firm is safe from other hostile takeover attempts for many years. d.defense tactics make the costs of a takeover lower. c. the employees directly involved in the wrongdo-ing. b. riskier strategies with more focused diversifica-tion for the firm. Of course not. When they argue, they do it in a pretty much respectful way. "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? a. earnings potential for: d. The CEO was a recipient of the Golden Peacock Award for Corporate Governance. As ownership of the corporation is diffused, shareholders' ability to monitor managerial deci-sions c. greenmail. High-performing boards: What's on their agenda? | McKinsey Corporate governance mechanisms sometimes fail to monitor and control top man-agers' decisions. Prior research on the effects of institutional investors often addresses shareholders and bondholder wealth and is commonly based on the framework of the conventional US/UK model of corporate control (Elyasiani et al. "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. Which of the following statements is most likely to be TRUE? An executive's decisions often affect firm performance only over the long run. "All of the following statements are TRUE about the use of defense tactics by the target firm during a hostile takeover EXCEPT: "Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. One explained raising issues around diversity in the leadership pipeline and his desire to make this a higher board priority: One of our board members who is African-American came up to me afterwards and said, Thank you for bringing that up because I brought it up years ago, not so delicately, and nothing ever happened. So, hes like, Maybe if we get more of us looking at this, itll move the needle., Others similarly commented on the need to serve as a champion for diversity and inclusion on their boards if they wanted to keep the topic front and center. Based on these findings, we worked with Mike Fucci, Chairman of the Board at Deloitte, to develop recommendations for how board chairs and directors can create more egalitarian board cultures and improve their governance. d. riskier strategies with greater diversification for the firm. The directors are all outsiders, experienced, and run their own successful firms. a. greenmail. a. management consultants. d. Corporate governance is best achieved with a board of directors with strong ties to management. 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 ____. c. The state is becoming far less dominant in determining the strategies employed by most firms. The average correlation is .15. c. incentives for Which of the following statements is most likely to be TRUE? c. salary. For a board comprised of lawyers, this might mean adding an engineer and a sociologist in the mix. c. poorly-performing firms d. The firing by President Obama of the CEO of General Motors because the board had failed to act in previous years. "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 interest-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. One interviewee revealed how she turned down a board position because she felt that the interviewing board members were not able to comment on her expertise only their desire to have gender diversity on the board. Many popular press articles and fund managers make this claim, citing studies by consulting firms, information providers and financial institutions, such as McKinsey, Thomson Reuters and Credit Suisse. Which of the following is TRUE of trends in Japan's corporate governance structure? b. a weak board of directors. If the market for corporate control were efficient as a governance device, then only ____ would be targets for takeovers. b. risk undertaken by managers to earn stock options. While new to the U.S., mandates to increase gender diversity on corporate boards are common elsewhere. Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. The compensation of top executives of Chinese companies is closely related to pri-or and current financial performance of the firm. c. the qualifications and experience of the CEO. Post and Byron (2015) synthesized the findings from 140 studies of board gender diversity with a combined sample of more than 90,000 firms from more than 30 countries. As one long-time board director described it: The problem is how boards get formed and how you fill vacancies. The relationship between CEO gender and long-term company performance is statistically significant, the authors find, but tiny. d.75. 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. Which of the following statements is true? c. liable for any illegal actions by the top management team. d. requiring that outside directors be truly objective by having no ownership interest in the firm. b. returned to them as dividends. b. a weak board of directors. So, existing findings could reflect a causal relationship, a reverse-causal relationship, or the effects of other variables. Diversity doesnt matter as much on boards where members perspectives are not regularly elicited or valued. The results of these two meta-analyses, summarizing numerous rigorous, original peer-reviewed studies, suggest that the relationship between board gender diversity and company performance is either non-exist (effectively zero) or very weakly positive. Knowledge at Wharton is an affiliate of the Wharton School of the University of Pennsylvania. Innovation Research Review: Does Gender Diversity on Boards Really Boost Company c. focusing attention on ineffective boards of directors. These dynamics appear to shape whether diversity on the board actually matters to the boards work. d.reduce their employment risk, increase the company's value, Agency costs reflect all of the following EXCEPT ____ costs. "Research suggests that boards of directors perform better if: b. inside b. enforcement a. the director of food service for IFS. a. some foreign firms have delisted on U.S. stock exchanges. b. firms earning above-average returns When executives have ownership positions or stock options with their employing firm, they are b. a. Amos Ball, Inc., is a printing company in Iowa that has been family owned and managed for three generations. Rigorous, academic studies of CEO gender and company performance tell much the same story as rigorous, academic studies of board gender diversity and company performance do. a. making CEOs more accountable for their performance. a. generate free cash flows, reduce the risk of total firm failure Evidence that board diversity benefits firms is mixed. Other things being equal, market analysts may, consciously or unconsciously, regard all-male boards as more competent than boards that are more gender-diverse. c. defense tactics vary in their effectiveness as a defense to takeovers. 1 The survey revealed dramatic differences in how directors . Which of the following is a FALSE statement about corporate governance? b. c. gives the Board of Directors more power. "Product diversification provides two benefits to managers that do not accrue to shareholders: ____ and ____. Also discuss the following: How will the company justify the travel costs? c. an increased number of IPOs (initial public offerings) are expected. This may lead to all EXCEPT: It might be unconscious bias. What circumstances would most likely have initiated this proposal? q:q:q: The air co nditioner is working. d. always outperforming their industry. What amount should Stallman report as its December 31 inventory? A majority of the directors are concerned that while Mr. Leagreet has been re-sponsible for the firm's earning above-average returns, he has been displaying a tendency to-ward personal extravagance at the firm's expense. d. the CEO is also the chairperson of the board of directors. a. increased diversification of Sierra Infusion. In sum, the research results suggest that there is no business case for or against appointing women to corporate boards. Write the statements in symbolic form . a. the strategic decision making process. Further, there is no evidence available to suggest that the addition, or presence, of women on the board actually causes a change in company performance. MGMT Chapter 10 Flashcards | Quizlet How to build a better, more just workplace. Which of the following statements is true? d. outside directors own significant equity in the organization. But while many prescriptions for improving corporate governance focus on the structure of. CamCell is presently searching for a new CEO. c. managers' risk of job loss, loss of compensation, and/or loss of reputation. d.potential tax burden for. Research suggests that boards of directors perform better ifa. They also raised. Five or so years after the financial crisis, the pressure on boards and directors to raise their game remains acute. Earn badges to share on LinkedIn and your resume. d. the opportunity for higher compensation through firm growth, a reduction in mana-gerial employment risk. c. executive compensation systems. That gives you an opening to say, Oh, okay, we need to look for somebody who understands manufacturing abroad. So, as long as we are going to go look for somebody, lets use it as an opportunity to build some diversity.. The report looked at S&P 500 companies that released full-year 2020 results as of May 31, 2021, analyzing their performance between 2018 and 2020. "If the market for corporate control were efficient as a governance device, then only ____ would be targets for takeovers. Research suggests that boards of directors perform - Course Hero d.the board of directors. Not included in the physical count were$25,000 of goods purchased from Pelzer Corporation, f.o.b. a. lead independent There are small but dependably positive associations of female representation in CEO positions and TMTs with long-term value creation for a firms fiscal outcomes. "Compared to managers, shareholders prefer: We find that companies are not any less profitable after appointing female directors to the board than they were prior to the appointment. c. the number of outside directors and the parties they represent. I think we all recognize the value and we all respect the diversity and the importance of diversity. b. Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. d. The CEO and top executives should not consider their jobs secure. a. risk that managers will behave opportunistically. Who is ultimately responsible for the corporate climate that resulted in this wrongdoing?

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