Question :
1.Ownership will likely be diffused under which of the following : 1332129
1.Ownership will likely be diffused under which of the following situations?
a.A start up firm.
b.Family owned firm.
c.State ownership.
d.All of the above.
e.None of the above.
2.Issues involved regarding how a board of directors can be established so as to be most effective include:
a.The insider/outsider mix.
b.CEO duality.
c.Board Interlocks.
d.The Role of Boards of Directors.
e.All of the above.
3.Boards of directors perform all of the following except:
a.Control.
b.Service.
c.Resource acquisition functions.
d.A through C above.
e.Day to day operations.
4.Which of the following make up a governance package?
a.Internal Mechanisms + External Mechanisms.
b.Carrots to motivate managers such as stock options.
c.Sticks that may result in CEO and top management team turnover.
d.The Market for Corporate Control.
e.The Market for Private Equity.
5.Three decades of privatization suggest all of the following except:
a.Privatization to insiders helps improve the performance of small firms.
b.In large corporations privatization to insiders, without external governance pressures, is hardly conducive for needed restructuring.
c.Outside ownership and control, preferably by blockholders, funds, foreigners, and/ or banks, are more likely to facilitate restructuring.
d.Such outside ownership and control does not happen frequently because incumbent managers do not necessarily welcome such outside “intrusion.”
e.When outside investors such as institutional investors do come in, they fail to assert their power.
6.Industry-Based Considerations regarding corporate governance include all of the following except:
a.Having more outside directors on the board is often regarded as having a negative impact on performance because of their lack of understanding as compared to insiders.
b.In industries characterized by rapid innovation requiring significant R&D investments (such as information technology), outside directors may have a negative impact on firm performance.
c.Research finds that for firms in low-growth, stable industries, no relationship exists between inside management ownership and firm performance.
d.In relatively high-growth, turbulent industries, there is a relationship between inside management ownership and firm performance.
e.In industries experiencing great turbulence, the presence of a single leader may allow a faster and more unified response to changing events.
7.Institution-based considerations in governance include all of the following except:
a.Formal institutional framework.
b.International experience of senior executives.
c.Formal legal protection and impact on founder’s dilution of equity.
d.Lack of legal protection and its impact regarding large shareholders in emerging economies.
e.Impact of informal norms and values.
8.Which are not among the aspects of globalization?
a.Contact with different governance norms.
b.FPI investors demand more protection.
c.The focus on governance has been replaced by a focus on shareholder value.
d.The thirst for global capital requires adherence to listing requirements.
e.The global diffusion of “best practices.”
9.Agency theory assumes that managers:
a.Have a responsibility to the owners.
b.Are agents who are opportunistic and engage in self-serving activities.
c.A and B above.
d.Can be left to their own devices.
e.Are effective steward of the owners’ interests.
10.In regards to global convergence:
a.Advocates argue that globalization will unleash a “survival-of the-fittest” process.
b.Advocates claim firms will be forced to adopt globally the best practices.
c.Others contend that governance practices will continue to diverge throughout the world.
d.The text indicates that complete divergence in corporate governance is probably unrealistic.
e.All of the above.
