research suggests that boards of directors perform better if

a. decision making responsibility to a second party. c. often performing above their industry averages. A majority of the directors are concerned that while Mr. Leagreet has been responsible for the firm's earning above-average returns, that he has been displaying a tendency toward personal extravagance at the firm's expense. 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. Innovation d. outside directors own significant equity in the organization. b. c. liable for any illegal actions by the top management team. This suggests that gender diversity on the board explains about two-tenths of 1% of the variance in company performance. However, rigorous, peer-reviewed academic research paints a different picture. c. determined by the size of the firm. Legislation, codes of conduct, and guidelines have been developed to improve corporate governance. ____ is an important influence in Japanese corporate governance structures. destination. 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.. d. outside directors own significant equity in the organization. The best evidence comes from a recent meta-analysis of 146 studies (Jeong and Harrison, 2017). The number of women among them? d.curvilinearly related to, "The longer the focus of managerial incentive compensation, the greater the ____ top-level managers. What amount should Stallman report as its December 31 inventory? a. lead independent c. financial institutions such as mutual funds and pension funds that control large-block shareholder positions. c. Institutional investors disapprove of long-term executive incentive plans and they may sell their blocks of stock in CamCell. Research has found little to no evidence supporting the idea that companies with female board directors perform better than companies run by all-male boards. a. a uniform compensation plan for all corporate executives, U.S. and foreign alike. Pletzer and his colleagues (2015) found that the average correlation between the percentage of women on the board and firm performance was small (.01) and not statistically significant. d. is eliminated. What circumstances would most likely have initiated this proposal? a. boards of directors. This may lead to all EXCEPT: c. the government. "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? But, thats impossible here; we cant randomly assign board members to companies. a. d.of the focus on stewardship-management in German firms rather than the financial perform-ance focus of U.S. firms. c. the firm's tax issues. a. moving toward having directors from different backgrounds The market for corporate control serves as a means of governance when b. a weak board of directors. The repurchase at a premium of shares of stock that have been acquired by the aggressor firm in a hostile takeover in exchange for an agreement that the aggressor will no longer target the com-pany for takeover is called a. the firm is overpriced in the market. "There is some evidence that those firms targeted for takeover by active corporate raiders are: 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. monitoring a. c. the laxity of institutional investors. b. Alternatively, work by Raaj Sah and Joseph Stiglitz suggests that diversity moderates group decisions. c. public pension funds c. private shareholders rarely have large ownership positions in the firm. c. reduce the risk of total firm failure, reduce their total portfolio risk The board has been successful in reducing the percentage of CEO pay that is composed of stock options. James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. A primary objective of corporate governance is to. The gap between CEO pay and the pay of other top executives at Chromatic was significantly larger than at Pixilair. The authors conclude the following: Undoubtedly, breaking the glass ceiling matters. 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. d. encumbered. The Vorstand of a German corporation makes decisions about organization direction and management. "All of the following statements are TRUE about the use of defense tactics by the target firm during a hostile takeover EXCEPT: The chapter Opening Case suggests that ___________ is (are) frequently blamed for high CEO pay during periods where corporate performance has been poor. c. the firm's top managers. b. appoint another individual as chairperson of the Board of Directors. c. Corporate governance mechanisms can be in conflict with one another. In Japan, the principal source of the active monitoring of large companies comes from Ambrose received: d. ownership of a company to a second party. b. strengthening the internal management and accounting control systems They are more a function of general market conditions. c. requiring outside directors to own significant equity stakes in the firm. By studying outcomes that are more proximal or immediately related to board decision-making than is company performance, researchers may shed more light on when, whether, and how diverse boards differ from all-male boards. c. executive compensation systems. a. increases in executive compensation. It might be unconscious bias. This will have no effect on the stock option plan design discussion, because CalPERS' main concern is stock dividends. "Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. y=2x+8;y=12;1x2y=-2x+8;y=12;-1\leq{x}\leq2 The market for corporate control may not be as efficient as previously thought as recent findings suggest that those firms targeted for takeover by active corporate raiders are a. the firm's free cash flow. Couple times it hasnt been but someone will just say, Hey thats not very respectful, you know the way you just said that., Several interviewees told us that boards that value open communication are more likely to engage in conversations about diversity even those that believe they still have a long way to go. c. used to reduce corporate debt. It is also important to consider recruiting from outside of the CEO and CFO pool to increase board diversity. a. significant pay reductions for many corporate CEOs c. related b. long-term incentives such as stock options. The women named to corporate boards may not in fact differ very much in their values, experiences, and knowledge from the men.. A virtually exclusive reliance on financial controls may occur when outsider-dominated boards exist. d.prevented by the Sarbanes-Oxley Act from owning more than 50% of the stock of any one firm. Which of the following statements is true? It is not uncommon for a firm to explicitly mention gender when they announce appointments of new board members but of course this only happens if the new board member is a woman. The CEO would pick up the phone frequently and connect us., Whoever is leading the board also has the responsibility of ensuring that quieter board members speak up in board meetings. b. the addition of outside directors to the board. And the greater the cognitive diversity, the better the board is at solving complex problems and coming up with novel solutions. a. Mr. Abercrombie will have a large market in Japan because the culture highly val-ues consensus decision making. By and large, the obverse is true: breaking glass helps firms slightly. Usually, large block shareholders are considered to be those shareholders with at least ____ percent of the firm's stock. Increases in board diversity may signal to investors that the firm is motivated by social goals and cares less about maximizing shareholder value. Women should be appointed to boards for reasons of gender equality, but not because gender diversity on boards leads to improvements in company performance. In contrast to managers' desires, shareholders usually prefer that free cash flows be c. having the stock option plan designed by insiders on the board of directors who are familiar with day-to-day operations of the firm. d. outsid e director s ow n significan t equit y i n th e organization . Which of the following statements is most likely to be TRUE? a. the number of stockholders and the parties they represent. "Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. d.the top management team's interests and the owners' interests are aligned. If male and female board members are fairly similar in their values, experience, and knowledge, the addition of women to an all-male board may not increase the boards cognitive variety as one might expect at first blush. The CEO was involved in overstating company revenues and profits. The governance mechanism most closely connected with deterring unethical behaviors by hold-ing top management accountable for the corporate culture is b. b. a. For example, Norway, Spain, France, and Iceland all have laws requiring that women comprise at least 40% of boards at publicly listed companies. 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. b. risks borne by The research literature includes over 100 studies of firms in 35 countries and five continents (Post and Byron, 2015). We find that companies are not any less profitable after appointing female directors to the board than they were prior to the appointment. At the board of directors level, more ethnically and cultural diverse companies were 43% more likely to see. 48 Nor are they any less profitable, for that matter. In contrast to hierarchical boards, more egalitarian boards have a more collegial board culture. Companies that engage in CSR, or intend to do so, may be particularly inclined to appoint women to the board. "The separation between firm ownership and management creates a(n) ____ relationship. 2023 Knowledge at Wharton. Hostile takeover attempts are so common that they do not reflect negatively on the firm's performance. One interviewee commented on how the board as a whole believed in the importance of diversity, but longer-term board members still struggled to understand its value. d. a system of cross-shareholding among firms. c. Competition Ownership concentration is determined by both a. making CEOs more accountable for their performance. As a means of increasing profits, IFS has used substandard ingredients in these meals and has consistently lied about this practice during quality investigations by the Marines. a. the director of food service for IFS All of the following statements are TRUE about the use of defense tactics by the target firm during a hostile takeover EXCEPT "Japanese keiretsu are: a. ATP has been the initiator of several hostile takeovers in the last two years. a. high executive turnover. 25 I think its also clear to say if youve got the longer-term members that came from the old established approach to the way boards were runthey may just not be quite as supportive in some cases., In boards like these, interviewees said discussing the issues rather that shrinking away from them was of utmost importance. a. small; small b. Compensation of CEOs in both private and public companies is being tied more closely to observable performance goals. d. reduction in R&D expenditure. a. some foreign firms have delisted on U.S. stock exchanges. One means that is considered to improve the effectiveness of outside directors is Researchers studied 1,644 public companies. d.always outperforming their industry. Mr. Abercrombie is considering expanding his consulting practice overseas. CamCell is presently searching for a new CEO. Her research examines how people manage multiple identities, boundaries, and inclusion in organizations while navigating any tensions associated with doing so. c. public pension funds This may lead to all of the following EXCEPT 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. b. CamCell may have to over-compensate its CEO in order to offset the personal risk a CEO would undertake under this plan. 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. These dynamics appear to shape whether diversity on the board actually matters to the boards work. The ownership of major blocks of stock by institutional investors have resulted in all of the fol-lowing EXCEPT The relationship was statistically significant suggesting it wasnt a chance effect but it was tiny. d. Individualism. HBR Learnings online leadership training helps you hone your skills with courses like Diversity, Inclusion, and Belonging. 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. 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The team members are becoming concerned about the security of their jobs at Sierra Infusion. d. reduce the size of the stock option package provided to Mr. Leagreet. 106. Which of the following is FALSE about corporate governance in China? 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 ). For an all-American board this might mean including individuals from other countries. c. uncontrollable events may affect the long-term performance of the firm. The CEO genuinely seeks their greater involvement. "The top management team at Sierra Infusion is concerned about the declining performance of firms in their industry. c. increased shareholder participation in decision making. a. going to actively defend their firm from takeover attempts. We merged our data on board composition and firm financials with social performance ratings from KLD STATS, an index for socially responsible investing. Which of the following is a FALSE statement about corporate governance? c. pressure the board of directors to reprice their stock options. The relationship between CEO gender and long-term company performance is statistically significant, the authors find, but tiny. d. dependent. b. company unions, which are a type of governance system. If this was the case, board diversity could have no effect on operating performance but still have a negative effect on market returns. Implementing a director appraisal system. d. outside directors own significant equity in the organization. d. Firms with higher state ownership tend to have lower market value and more vola-tility in those values over time. In sum, the research results suggest that there is no business case for or against appointing women to corporate boards. a. reasonably compensating a CEO. This wouldnt be a problem if diversity initiatives were not seen by many investors as little more than costly experiments. d.consulting accounting advisors to make sure that the plan transfers wealth to the CEO without immediately appearing on the balance sheet of CyberScope. Stallman Company took a physical inventory on December 31 and determined that goods costing $200,000 were on hand. b. strengthens the governance processes of the firm. d.is less expensive than maintaining two top executives. a. unsubstantial profits a. usually on the verge of bankruptcy. She shared, I can understand what it means to be a token person. Combined, the board members held seats on 47 corporate boards in the U.S. across a variety of industries. a. generate free cash flows, reduce the risk of total firm failure a. high executive turnover. d.reduce the size of the stock option package provided to Mr. Leagreet. b. Evidence that board diversity benefits firms is mixed. The slow progress on gender diversity has frustrated policymakers, industry groups, and institutional investors, many of whom have publicly advocated for inclusion of women and minorities among the top ranks of management. b. likely to gain financially if their employing firm is taken over by another. d.more variable. d. over-valued firms. Mr. Abercrombie is con-sidering expanding his consulting practice overseas. Research suggests that boards of directors perform better ifa. Even if the women named to corporate boards are different from the men on these boards, they may not speak up in board conversations and they may lack the influence to change the boards decisions. d.establishing and using formal processes to evaluate the board's performance. According to the excerpt, how do production processes affect the comparative advantage of the United States? c. strategy implementation actions to functional managers. Managers may decide to invest ____ in products that are not associated with the firm's current lines of business to increase the firm's level of diversification and decrease their employment risk. The Chinese governance system has been moving towards the Western model in recent years. d.likely to be terminated by the acquiring firm even in a friendly takeover. c. gives the Board of Directors more power. c. the board is homogenous incomposition. c. defense tactics vary in their effectiveness as a defense to takeovers. c. executive compensation systems. Boards that want to maximize their effectiveness need to do more to ensure that different perspectives are regularly elicited and integrated into the boards work. What circumstances would most likely have initiated this proposal? d.tying the compensation of CEOs to measur-able financial criteria. ____ is an important influence in Japanese corporate governance structures. d. riskier strategies with greater diversification for the firm. a. d. governmental relations. d.Traditionally privately-owned Japanese firms are going public. a. a uniform compensation plan for all corporate executives, U.S. and foreign alike. b. may not have a direct effect on firm performance. 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. b. a standstill agreement. To make diverse boards more effective, boards need to have a more egalitarian culture one that elevates different voices, integrates contrasting insights, and welcomes conversations about diversity. d.outside directors own significant equity in the organization. 25 a. available to comment to external analysts. Pletzer, Nikolova, Kedzior, and Voelpel (2015) took a different approach, conducting a meta-analysis of a smaller set of studies 20 studies that were published in peer-reviewed academic journals and that tested the relationship between board gender diversity and firm financial performance (return on assets, return on equity, and Tobins Q). Working in a group, discuss how the New Therapy Company can meet the deadline and still ensure a high quality of care. c. the corporation has greatly exceeded perform-ance expectations. a. equivalent See answer Advertisement sandlee09 Answer: c. Explanation: d.requiring that outside directors be truly objective by having no ownership interest in the firm. 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 We interviewed 19 board directors (15 women and four men) to learn whether and how corporate boards were benefiting from diversity. Consider two recent meta-analyses that have been conducted to summarize prior research on the topic. After all, both male and female board members are likely to be selected for their professional accomplishments, experience, and competence. c. reduce the risk of total firm failure, reduce their total portfolio risk "Recent research evidence shows that ownership concentration is associated with: Some research suggests, for example, that gender-diverse boards make fewer acquisitions than all-male boards (. CamCell is presently searching for a new CEO. b. increasing the concentration of ownership of large U.S. firms. d. Banks have less influence on the governance of German corporations than they do on U.S. corporations. b. stock brokerage companies. When executives have ownership positions or stock options with their employing firm, they are: d.is eliminated. c. The CEO was never held responsible for his unethical actions. While its possible that the addition of women to the board causes an increase in CSR, existing research cannot prove it. All rights reserved. d. has weakened the effect of other governance mechanisms. c. lower a. Satyam's stock price suffered a significant decline. | Brian Berkey. Other research has found no relationship to performance at all. Historically, ____ have been at the center of German corporate governance structure. At a meeting over dinner, the top management team agrees to go to the board of directors with a proposal for Many boards are also broadening the range of professional backgrounds considered for board member positions, allowing them to attract more socially diverse directors who bring, as one interviewee referred to it, diversity of thought. This is easier to achieve when boards avoid filling open seats with people already in their personal and professionals networks. c. Membership of U.S. boards of directors is less directly influenced by the company's employees than is the membership of German Aufsichsrat. c. crossing the palm with silver. b. institutional shareholders Yet, the answers have not been clear or consistent. The board wishes the CEO to take more short-term risks in order to achieve poten-tially higher long-term returns.

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