research suggests that boards of directors perform better if

If this was the case, board diversity could have no effect on operating performance but still have a negative effect on market returns. a. Differing views between board members act as a governance mechanism, preventing radical decisions from being made. The Vorstand of a German corporation makes decisions about organization direction and management. d.a silver handshake. c. marginal profits Members of these boards believe that both their expertise and willingness to learn is recognized and incorporated into the boards work. "Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. b. increase the price of the firm's stock, increase the dividends paid out from free cash flows b. risks borne by And to the extent investors care about shareholder value, they will penalize those companies they suspect are putting other goals first. The compensation of top executives of Chinese companies is closely related to pri-or and current financial performance of the firm. 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. And even when individuals who are minorities, tokens, or outliers speak up, the majority group members may discount their views. One board member shared: We look at diversity in a lot of different ways experience, age, ethnicity, gender, etc.. d. the proportion of insiders on the board of directors. b. a weak board of directors. a. decision making responsibility to a second party. 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. c. safer strategies with more focused diversification for the firm. b. the board includes employees as voting members. d. ownership of a company to a second party. "Amos Ball, Inc., is a printing company in Iowa that has been family owned and managed for three generations. The New York Stock Exchange requires that the audit committee be c. The CEO/Chairperson of the Board has been suspected of opportunistic behavior. Whats going on here? b. Indeed, this is what Post and Byrons meta-analysis showed. "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. d.reduce their employment risk, increase the company's value, Agency costs reflect all of the following EXCEPT ____ costs. c. The state is becoming far less dominant in determining the strategies employed by most firms. The CEO and the top executives successfully fended off the takeover and are concentrating on strategies to improve the performance of the firm. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. The decisions made by top-level managers are typically complex and nonroutine. a. unsubstantial profits Historically, ____ have been at the center of the German corporate governance structure. Consequently, the board is Nor do they perform worse. a. the roles of CEO and chairperson of the board of directors are usually combined. a. increases. d.encumbered. Conventional wisdom says gender diversity in the corporate boardroom improves company performance. "The governance mechanism most closely connected with deterring unethical behaviors by holding top management accountable for the corporate culture is: 25 Find the area bounded by the graphs of the indicated equations over the given intervals (when stated). 5 Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. See answer Advertisement sandlee09 Answer: c. Explanation: Which of the following statements is most likely to be TRUE? c. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities c. the board is homogenous in composition. Similarly, the relationship of top management team (TMT) gender diversity and company performance is statistically significant but very small. 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. 5 c. is so aggressive that boards of directors have become overly cautious. 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. So, existing findings could reflect a causal relationship, a reverse-causal relationship, or the effects of other variables. 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. equivalent Given global interest in the effects of board gender diversity and the availability of abundant data on board gender composition and firm performance, many researchers have investigated the topic. d. ownership of a company to a second party. Companies that engage in CSR, or intend to do so, may be particularly inclined to appoint women to the board. Innovation If these dynamics occur within corporate boards, boards may not take full advantage of their own cognitive variety. a. Mr. Abercrombie will have a large market in Japan because the culture highly values consensus decision making. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. a. monitoring One interviewee commented on how having social diversity wasnt good enough if all board members were former CEOs or CFOs. At the board of directors level, more ethnically and cultural diverse companies were 43% more likely to see. Which of the following statements is about corporate governance in Germany is FALSE? d. outside directors own significant equity in the organization. Archibald Smith has moved from an upper-middle management job at Chromatic Array, Inc., to a similar position with Pixilair Corporation. c. poorly-performing firms We think this happens because female board appointments are anything but gender neutral. d.has weakened the effect of other governance mechanisms. Its worth noting that even if the meta-analyses revealed a stronger relationship between board gender diversity and firm performance, we couldnt conclude that board gender diversity causes firm performance. a. Another recent study by Jonson et al. Which of the following statements is likely to be TRUE? She said, Having a diversity on the board does not just mean having a bunch of CEOs or a bunch of capitalists.Having board members with different roles whether its a CIO or a CTO or you know independent board directors that come from a different background is really good. b. enforcement primary focus is on maximizing shareholder value. d. a poison pill. 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. c. the number of outside directors and the parties they represent. b. d.curvilinearly related to, "The longer the focus of managerial incentive compensation, the greater the ____ top-level managers. b. a poison pill. Ambrose received: a. risk that managers will behave opportunistically. Compared to managers, shareholders prefer What difference can Archibald expect? A recent survey of more than 770 directors from public and private companies across industries around the world and from nonprofit organizations suggests that some are responding more energetically than others. In order to limit Mr. Leagreet's power, the board of directors plans to Which of the following is most likely to be TRUE? Earn badges to share on LinkedIn and your resume. d. the opportunity for higher compensation through firm growth, a reduction in managerial employment risk. According to the excerpt, how do production processes affect the comparative advantage of the United States? p:p:p: The temperature is 9090^{\circ}90. Of course not. Historically, ____ have been at the center of German corporate governance structure. Executive compensation is a governance mechanism that seeks to align managers' and owners' interests through all of the following EXCEPT d. the number of outside directors and total percentage of shares they own. 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. The Vorstand is elected by the firm's employees. d.the board of directors. y=2x+8;y=12;1x2. a. negatively related to: 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. 47; Gender-diverse boards also tend to adopt more progressive organizational management practices, such as work-life support programs, which increase employee satisfaction. a. earnings potential for You know you might have somebody from HR on the board. d.riskier strategies with greater diversification for the firm. c. requiring outside directors to own significant equity stakes in the firm. But research conducted by consulting firms and financial institutions is not as rigorous as peer-reviewed academic research. Women should be appointed to boards for reasons of gender equality., Women Directors and Other Dimensions of Company Performance. d. prevented by the Sarbanes-Oxley Act from owning more than 50% of the stock of any one firm. "Compared to managers, shareholders prefer: And in many cases, this might mean recruiting board members outside of existing networks. b. a weak board of directors. His current boards are shifting to a different approach: a process of assessment where you periodically look at the skill sets that you would ideally want on the board, given the business its in, and then the skill sets you have, and you identify any missing. The CEO tended to dominate the conversation. Given the findings of research on board gender diversity, one might wonder about the effects on company performance of CEO gender and top management team gender diversity. a. the number of stockholders and the parties they represent. The CEO of Alta Corp. is dismayed by a lack of effort and insights his directors provide during board meetings. a. 5. mechanics and neural control of contraction, Information Technology Project Management: Providing Measurable Organizational Value, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine. Consequently, the board is: "Managerial employment risk is the: Consequently, the board has decided on an incentive plan that involves payout based on the firm's performance five years in the future. They prefer to start from a position of trust. 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. b. the market for corporate control. b. strengthening the internal management and accounting control systems 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. This plan will be very attractive in luring candidates for the CEO position. 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.. 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. The chapter Opening Case indicates that many CEOs earn more than ____times the amount re-ceived by their firm's lowest-paid employee. c. the corporation has greatly exceeded performance expectations. "Executive compensation is a governance mechanism that seeks to align managers' and owners' interests through all of the following EXCEPT: During the debate, one of the directors raises the point that CalPERS owns a significant portion of Acme Brand stock. The two meta-analyses reached very similar conclusions, despite the differences in the underlying studies (140 studies vs. 20, etc.). I think we all recognize the value and we all respect the diversity and the importance of diversity. a. increased diversification of Sierra Infusion. Nor are they any less profitable, for that matter. b. c. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities b. may not have a direct effect on firm performance. d.75. d. always outperforming their industry. b. more common than data values close to the mean. James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. "The argument for having one individual serve as CEO and chairperson of the Board of Directors is that this: 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. 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. All of the following are consequences of the Sarbanes-Oxley Act EXCEPT d. reduction in R&D expenditure. The average correlation between board gender diversity and firm market performance (such as stock performance, shareholder returns) was even smaller and was not statistically significant. b. increased diversification of the firm. "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. Depending on which meta-analysis you read, board gender diversity either has a very weak relationship with board performance or no relationship at all. d. the top management team's interests and the owners' interests are aligned. "The market for corporate control serves as a means of governance when: Women board directors are more likely than men to identify social issues like human rights, climate change, and income inequality as critical to corporate strategy. In contrast to hierarchical boards, more egalitarian boards have a more collegial board culture. a. available to comment to external analysts. a. shareholders in the large institutional firms listed on the New York Stock Exchange. The CEO was involved in overstating company revenues and profits. While its possible that the addition of women to the board causes an increase in CSR, existing research cannot prove it. In order to limit Mr. Leagreet's power, Board of Directors plans to: d. reduction in R&D expenditure. 25 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. focusing attention on ineffective boards of directors. c. the employees directly involved in the wrongdo-ing. d. All of these choices would increase involvement. a. Board diversity matters but concentrating on only one form of diversity isnt enough. Sometimes, its laziness. Which of the following is a FALSE statement about corporate governance? Also discuss the following: How will the company justify the travel costs? b. defense tactics are opposed by institutional investors. Stallman Company took a physical inventory on December 31 and determined that goods costing $200,000 were on hand. c. determined by the size of the firm. a. ownership concentration. It is therefore not much of a leap to assume companies appoint female directors as part of a diversity initiative. a. the roles of CEO and chairperson of the board of directors are usually combined. 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 ____. d. is eliminated. After all, both male and female board members are likely to be selected for their professional accomplishments, experience, and competence. a. reasonably compensating a CEO. Does this mean that we should not promote women to corporate boards? a. d. the opportunity for higher compensation through firm growth, a reduction in mana-gerial employment risk. shipping point, and $22,000 of goods sold to Alvarez Company for$30,000, f.o.b. d.banks. This suggests that gender diversity on the board explains about two-tenths of 1% of the variance in company performance. c. related Research suggests that the activism of institutional investors such as TIAA-CREF and CalPERS You know people listen. 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. Researchers have also studied the relationship between board diversity and various board decisions and practices such as acquisitions, board monitoring and dividend payouts (Ararat, Aksu, Cetin, 2015; Chen, Crossland and Huang, 2016; Chen, Leung, & Goergen, 2017). b. the board includes employees as voting members. b. We find that companies that appoint women to the board see a decline in their market value for two years following the appointment (after which we no longer see any effect). c. elevation of foreign executive compensation to U.S. levels. b. financial responsibility to employees. a. a golden parachute. b. the board includes employees as voting members. b. government auditors. a. increases in executive compensation. "An agency relationship exists when one party delegates: A virtually exclusive reliance on financial controls may occur when outsider-dominated boards exist. "Managers in the U.S. receive ____ compensation than managers in the rest of the world. c. incentives for As an illustration, I show that two current measures of board of director performance, board meeting activity and director attendance, suggest that the boards of Asian firms do not compare favorably to the boards of firms from developed markets. a. firms with unethical top executives It would be wrong to say that we are 100% of where we ought to be. A takeover defense wherein preferred stock in the merged firm is offered to shareholders at a highly attractive rate of exchange is called c. the laxity of institutional investors. "As ownership of the corporation is diffused, shareholders' ability to monitor managerial decisions: c. A number of factors intervene between top-level management decisions and firm performance (e.g., unpredictable economic, social, or legal changes). a. elect an insider as the lead director. The CEO and the top executives successfully fended off the takeover and are concentrating on strategies to improve the performance of the firm. d. outside directors own significant equity in the organization. d.penalties for inadequate firm performance. While the relationship between board gender diversity and company performance is very weak, there appears to be a somewhat stronger relationship between board gender diversity and corporate social responsibility (CSR). c. uncontrollable events may affect the long-term performance of the firm. a. increases shareholder value significantly. c. the qualifications and experience of the CEO. a. a. 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. d. potential tax burden for. What would you recommend? a. some foreign firms have delisted on U.S. stock exchanges. At a meeting over dinner, the top management team agrees to go to the board of directors with a proposal for: a. the director of food service for IFS. b. Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. a. generate free cash flows, reduce the risk of total firm failure a. making CEOs more accountable for their performance. d. more variable, The longer the focus of managerial incentive compensation, the greater the ____ top-level man-agers. d. has weakened the effect of other governance mechanisms. They increase the boards cognitive variety. The greater a boards cognitive variety, the theory goes, the more options it is likely to consider and the more deeply it is likely to debate those options. c. The CEO was never held responsible for his unethical actions. b. banks and other lending institutions that have provided major financing to the firm. "Institutional owners are: a. the firm's free cash flow. Consensus There have been many rigorous, peer-reviewed studies of board gender diversity. d. The gap in compensation between CEOs in public and private companies is in-creasing. b. CamCell may have to over-compensate its CEO in order to offset the personal risk a CEO would undertake under this plan. The CEO genuinely seeks their greater involvement. Innovation b. long-term incentives such as stock options. Because meta-analyses provide a statistical summary a sophisticated averaging of the results of prior studies, their findings are much more credible than the findings of any single study. Commentators often suggest that corporate boards that include women will make better decisions than boards that include only men. b. returned to them as dividends. d. Firms with higher state ownership tend to have lower market value and more vola-tility in those values over time. CamCell is presently searching for a new CEO. "Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(an) ____ director. for example, one consultant observed the following: Pletzer, Nikolova, Kedzior, and Voelpel (2015), The Subtle Levers That Influence Affirmative Action, How Reshoring Will Restore the Drug Supply Chain, Climate Crisis: Who Is Responsible for the Planet? If so, board gender diversity may be positively related to accounting returns, but not market returns. b. risk undertaken by managers to earn stock options. a. a golden parachute. c. determined by the size of the firm. Who is ultimately responsible for the corporate climate that resulted in this wrongdoing? c. equally as common as data values close to the mean. a. boards of directors. However, rigorous, peer-reviewed academic research paints a different picture. "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. People coming from that diverse role I think really does help a board to get better results.. 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. 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. The ownership of major blocks of stock by institutional investors have resulted in all of the fol-lowing EXCEPT The average correlation is .15. The chapter Opening Case suggests that ___________ is (are) frequently blamed for high CEO pay during periods where corporate performance has been poor. The women named to corporate boards may not in fact differ very much in their values, experiences, and knowledge from the men who already serve on these boards. b. organizational size. 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. Which of the following is TRUE of trends in Japan's corporate governance structure? d.the difference in risk propensity between owners and managers. Other research has found no relationship to performance at all. 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. Mr. Abercrombie has had striking success in reducing conflict and hostility among directors and allowing boards to develop more cohesiveness. the CEO is also the chairperson of the board of directors.b. To test this theory, we conducted an experiment with 193 alumni and current students of a top-tier international business school. a. some foreign firms have delisted on U.S. stock exchanges.
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