1) Pre-emptive right is the obligation to purchase new shares issued by the company to maintain a shareholder’s percentage ownership in the company. Good corporate governance helps companies operate more efficiently, mitigate risk, and safeguard against mismanagement, and improve access to capital that will fuel their growth. The fundamental objectives of corporate governance are improvement of shareholder value and conscious consideration of the interests of other stakeholders.
1) Pre-emptive right is the obligation to purchase new shares issued by the company to maintain a shareholder’s percentage ownership in the company. Good corporate governance helps companies operate more efficiently, mitigate risk, and safeguard against mismanagement, and improve access to capital that will fuel their growth. The fundamental objectives of corporate governance are improvement of shareholder value and conscious consideration of the interests of other stakeholders.
1) Pre-emptive right is the obligation to purchase new shares issued by the company to maintain a shareholder’s percentage ownership in the company. Good corporate governance helps companies operate more efficiently, mitigate risk, and safeguard against mismanagement, and improve access to capital that will fuel their growth. The fundamental objectives of corporate governance are improvement of shareholder value and conscious consideration of the interests of other stakeholders.
1) Pre-emptive right is the obligation to purchase new shares issued by the company to maintain a shareholder’s percentage ownership in the company. Good corporate governance helps companies operate more efficiently, mitigate risk, and safeguard against mismanagement, and improve access to capital that will fuel their growth. The fundamental objectives of corporate governance are improvement of shareholder value and conscious consideration of the interests of other stakeholders.
Some of the key takeaways from the passages include the roles and responsibilities of boards of directors and management in corporate governance, as well as factors like agency costs, stakeholder interests, and performance measurement.
The main roles of non-executive directors include monitoring performance, audit, and setting strategy.
Some of the incentives and disincentives of agency under principal-agent relationship mentioned are takeover threat, threat of being fired, and share incentives.
1) Pre-emptive right is the obligation to purchase carrying out strategic policies as established by
new shares issued by the company to maintain the board of directors.
a shareholder’s percentage ownership in the TRUE company. 13) In some European countries, many directors FALSE there feel that it is their primary responsibility 2) Goal congruence is the harmony and alignment to protect the shareholders of a company first. of goals of both the principal and the agent FALSE which is consistent with the overall objectives 14) A company which wants to set up an employee of the organization. stock ownership plan creates a trust to which it TRUE makes annual contributions. 3) The fundamental objectives of corporate TRUE governance are improvement of shareholder 15) The foundation of good corporate governance is value and conscious consideration of the the intelligence of directors and senior interests of other stakeholders. management. TRUE FALSE 4) Good corporate governance helps companies 16) The rules dictating voting procedures and other operate more efficiently, mitigate risk, and aspects of corporate governance for a safeguard against mismanagement, and corporation are improve access to capital that will fuel their THE ARTICLES OF INCORPORATION growth. 17) The primary inside stakeholder of a corporation TRUE SHAREHOLDERS 5) According to Ambrose Bierce, a corporation is 18) Which of the following would contribute to an ingenious way of obtaining profit with little information risk individual responsibility. - INAPPROPRIATE MANAGEMENT OVERRIDE FALSE - UNSUITABLE CONTROL ENVIRONMENT 6) Most people believed that private ownership of - LACK OF SINCERE MANAGEMENT business is more ideal than government SUPERVISION ownership to achieve the best economic 19) Which one is not a benefit of good governance? decisions. REDUCTION OF CORPORATE VALUE TRUE BENEFITS: 7) Line authority is a vertical flow of authority - IMPROVES MARKETABILITY between specialists in advisory positions and - REDUCE VULNERABILITY OF COMPANIES line management teams. - IMPROVES COMPANY’S CREDIBILITY FALSE 20) The basic premise on accountability is that 8) Decentralization is always better than accountable organization will centralization. - SET GOALS AND STANDARDS AGAINST FALSE WHICH STRATEGY AND ASSOCIATED CAN 9) The political environment in which a firm BE MEASURED AND EVALUATED operates has a negligible impact on a company's - SET A POLICY BASED ON BALANCE international operating activities. UNDERSTANDING AND RESPONSE TO FALSE MATERIAL STAKEHOLDERS ISSUES AND 10) Professional bureaucracy is best at mass CONCERNS produced tasks and is characterized by many - DISCLOSED CREDIBLE INFORMATION layers of management and formal procedures. 21) Which form of invested capital is subject to FALSE most of the firm's business and financial risk? 11) Many companies work on a rotating system so EQUITY CAPITAL that only a fraction of directors are up for 22) Which one is/are part of corporate governance? election each year which makes it much more - BOD difficult for a complete board change to take - CEO place due to a hostile takeover. - CFO TRUE 12) The CEO is usually the singular organizational position that is principally accountable in 23) Which one is among the incentives and 34) The world that we perceive is for the most part disincentives of agency under principal-agent CONSTRUCTED INTERNALLY ON THE BASIS OF relationship? INDIVIDUALS’ BELIEFS AND PERCEPTUAL - TAKEOVER THREAT FILTERS - THREAT OF BEING FIRED 35) Are becoming more prevalent in fast moving - SHARE INCENTIVES fields like biotechnology, where knowledge is so 24) Agency costs refer to complex and widely dispersed that THE COSTS THAT ARISE DUE TO CONFLICTS OF organizations find it impractical to exercise INTEREST BETWEEN SHAREHOLDERS AND initiatives alone MANAGERS MATRIX STRUCTURES 25) Which one is not the role of non-executive 36) When deciding how to coordinate work roles director? and units in an organization it is best to IMPLEMENTS INTERNAL CONTROL USE EITHER VERTICAL OR HORIZONTAL ROLES: COORDINATION BUT NOT BOTH - MONITORING OF PERFORMANCE 37) Which type of investor causes the most - AUDIT problem for CEOs in developing strategic plans? - SETTING OF STRATEGY SHAREHOLDERS SEEKING SHORT-TERM GAINS 26) One of the tasks for financial managers when 38) The chief contribution of Henry Mintzberg’s identifying projects that increase firm value is to conception of structural possibilities is identify those projects where A DETAILED PRESCRIPTION OF HOW TO BENEFITS ARE AT LEAST EQUAL TO THE STRUCTURE AN ORGANIZATION IN RESPONSE PROJECT’S COSTS TO DIFFERENT MISSIONS AND EXTERNAL 27) Forecasting and measuring organizations CHALLENGES TO ENVISION ORGANIZATIONS performance is accomplished through AS WEBS OF INCLUSION PLANNING AND CONTROL SYSTEMS 39) In the first three decades of the twentieth 28) As a manager, you encountered an important century, working conditions were horrible and problem that seems almost impossible to solve. dangerous, and abuses were common. Most Top management would likely suggest that you: people of the time believed these abuses would TRY USING DIFFERENT LENSES TO ANALYZE be rectified by THE PROBLEM AND DEVELOP STRATEGIES STRICT GOVERNMENT ACTION TO PUNISH THE 29) As described the actions of the successful OFFENDERS manager as similar to a skilled carpenter using 40) In the long run, the success of a company is the right tools for the job. Thus, a successful built on manager must LONG-TERM RELATIONSHIPS WITH POSSESS “A DIVERSE COLLECTION OF HIGH- CUSTOMERS BUILT ON MUTUAL RESPECT AND QUALITY IMPLEMENTS (I.E. FRAMES)” ALONG COOPERATION THAT LEAD S TO REPEAT WITH THE KNOWLEDGE OF WHEN AND HOW PURCHASING TO USE THEM 41) In Henry Mintzberg’s conception structural 30) It is argued that even the smartest managers possibilities, the __________ is composed of take foolish actions in decision making because specialists, technicians and analysts who they standardize, measure, and inspect output and HAVE A PAROCHIAL AND DISTORTED VIEW OF procedures THE PROBLEM AT HAND TECHNO-STRUCTURE 31) Lateral coordination is often achieved through 42) When defining an organization’s structure, the A CLEAR CHAIN OF COMMAND key consideration should involve 32) Patriarchal organizations are characterized by a ALLOCATION OF RESPONSIBILITIES ACROSS DOMINANT FATHER FIGURE OR A RULER WITH DIFFERENT UNITS AND MEMBERS, AS WELL AS ALMOST UNLIMITED AUTHORITY AND POWER THE INTEGRATION OF THESE EFFORTS IN 33) When designing the structure of an PURSUIT OF COMMON GOALS organization, creating roles, and units yields the benefits of specialization but creates problems of COORDINATION AND CONTROL 43) Employee’s commitment develop from EMPLOYEES WHO BELIEVE THEIR FUTURE IS TIED TO THAT OF THE ORGANIZATION AND ARE WILLING TO MAKE PERSONAL SACRIFICES FOR THE ORGANIZATION 44) Forecasting and measuring organizations performance is accomplished through PLANNING AND CONTROL SYSTEMS 45) What does the government encourage in order to protect the consumer’s right to choose? COMPETITION