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Reading 48: The Corporate Governance of Listed Companies:

1.Rochelle Dixon is delivering a presentation on best practices for corporate governance. Two of her recommendations are as follows:

Statement 1: To avoid the potential for harming shareholders’ interests by wasting company resources, the Board of Directors should get management’s approval before it hires outside consultants.

Statement 2: The more members a Board of Directors has, the more likely it is to represent shareholders’ interests fairly.

Are Dixon’s statements correct?

 

Statement 1

Statement 2

 

A)                                        Correct  Correct

B)                                        Incorrect       Incorrect

C)                                        Correct  Incorrect

D)                                        Incorrect       Correct


2.A board of directors is most likely to protect the shareholders’ interests when:

A)   the board requires that management attend all meetings.

B)   the board includes representatives from the firm’s key customers and suppliers.

C)   one individual can be identified as the leading board member from outside the firm.

D)   a majority of the board is comprised of the firm’s key executives.

thanks

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  thanks

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yes

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d

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thanks

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s

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thx

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Thank you

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Thank you

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