d.tying the compensation of CEOs to measur-able financial criteria. q:q:q: The air co nditioner is working. It would be wrong to say that we are 100% of where we ought to be. Research suggests that boards of directors perform - Course Hero Other things being equal, market analysts may, consciously or unconsciously, regard all-male boards as more competent than boards that are more gender-diverse. Archibald Smith has moved from an upper-middle management job at Chromatic Array, Inc., to a similar position with Pixilair Corporation. the board includes employees as voting members.c. a. greater emphasis on stock options b. larger proportion of insiders on the board of directors c. smaller pay gap between the CEO and other top executives d. benchmarking used for top executive pay C a. the roles of CEO and chairperson of the board of directors are usually combined. Based on these findings, we worked with Mike Fucci, Chairman of the Board at Deloitte, to develop recommendations for how board chairs and directors can create more egalitarian board cultures and improve their governance. c. the employees directly involved in the wrongdoing c. safer strategies with more focused diversifica-tion for the firm. For example, Norway, Spain, France, and Iceland all have laws requiring that women comprise at least 40% of boards at publicly listed companies. c. Institutional investors disapprove of long-term executive incentive plans and they may sell their blocks of stock in CamCell. a. equivalent b. the board of directors of IFS. Research suggests that boards of directors perform better ifa. According to a 2016 Bloomberg analysis, five of the biggest U.S. activist funds had succeeded in getting over 100 board members appointed in the previous five years. You know people listen. Companies with a Digitally Savvy Board Perform Better 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. internal controls have failed. b. CamCell may have to over-compensate its CEO in order to offset the personal risk a CEO would undertake under this plan. b. appoint another individual as chairperson of the board of directors. b. government auditors. I think we all recognize the value and we all respect the diversity and the importance of diversity. 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. a. high executive turnover. d.internal auditing costs have increased by about one-third. Yet, the answers have not been clear or consistent. Commentators often suggest that corporate boards that include women will make better decisions than boards that include only men. Based on these findings, they worked with the Chairman of the Board at Deloitte to develop recommendations for how board chairs and directors can create more egalitarian board cultures and improve their governance. This is in line with numerous academic studies that have found little to no evidence supporting the idea that board diversity leads to better financial performance. c. determined by the size of the firm. The team members are becoming concerned about the security of their jobs at Sierra Infusion. Managerial employment risk is the a. management structures related to total quality management systems. HBR Learnings online leadership training helps you hone your skills with courses like Diversity, Inclusion, and Belonging. You know you might have somebody from HR on the board. a. mandating that all outside directors be drawn from government or academia rather than industry. d. greater concentration on Sierra's core industry. c. lobby legislators to pass laws that are aligned with the organization's interests. "Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. a. mandating that all outside directors be drawn from government or academia rather than industry. 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. a. boards of directors. b. risk undertaken by managers to earn stock options. But academic research says otherwise. b. a. Mr. Abercrombie will have a large market in Japan because the culture highly values consensus decision making. Nor are they any less profitable, for that matter. b. typically under-performing their industry. a. the firm is overpriced in the market. d.reduce their employment risk, increase the company's value, Agency costs reflect all of the following EXCEPT ____ costs. Given the demands for greater accountability and improved performance, which of the follow-ing is NOT a voluntary change many boards of directors have initiated? Board gender diversity thus explains about 1% of the variance in companies engagement in CSR. "Boards of directors are now becoming more involved in: We dont know and cannot know. 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. How diversity, equity, and inclusion (DE&I) matter | McKinsey a. lead independent "Japanese keiretsu are: "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. c. elevation of foreign executive compensation to U.S. levels. b. inside 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.. a. Satyam's stock price suffered a significant decline. 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. c. Research shows that once a hostile takeover has been defeated, the firm is safe from other hostile takeover attempts for many years. b. a. a. the strategic decision making process. Activist shareholders are not necessarily more convinced about diversity being a source of value creation. c. the firm's tax issues. They also raised concerns with what they referred to as checking the box initiatives and tokenism for the sake of board diversity. Does this mean that we should not promote women to corporate boards? Who is ultimately responsible for the corporate climate that resulted in this wrongdoing? c. the qualifications and experience of the CEO. The board of directors of CamCell, Inc., wishes to design a CEO compensation plan that will align the personal interests of the CEO with the interests of the shareholders in long-term firm performance. a. installation of an outsider as the lead director on the Board of Directors. d. Corporate governance is best achieved with a board of directors with strong ties to management. This isnt a strong relationship, but its a good bit stronger than the relationship between board diversity and corporate performance. d.has weakened the effect of other governance mechanisms. When they argue, they do it in a pretty much respectful way. d. outside directors own significant equity in the organization. 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. The separation between firm ownership and management creates a(n) ____ relationship. d. government agencies. This wouldnt be a problem if diversity initiatives were not seen by many investors as little more than costly experiments. The interests of multinational corporations' shareholders may be best served when there is a. a golden parachute. Do companies with women on the board perform better than companies whose boards are all-male? Which of the following statements is most likely to be TRUE? b. requiring that outside directors be former executives of the firm. b. the total revenue of the firm. b. greater managerial autonomy. a. available to comment to external analysts. b. the board includes employees as voting members. c. public pension funds d. Large institutional investors such as pension funds, and insurance companies are relatively insignificant owners of corporate stock. c. is so aggressive that boards of directors have become overly cautious. Which of the following statements is true? All rights reserved. b. increasing the concentration of ownership of large U.S. firms. "All of the following statements are TRUE about the use of defense tactics by the target firm during a hostile takeover EXCEPT: The CEO of Alta Corp. is dismayed by a lack of effort and insights his directors provide during board meetings. b. 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? Mary-Hunter (Mae) McDonnell is an assistant professor of management at the Wharton School of the University of Pennsylvania where she conducts research on the topics of non-market strategy and corporate governance. It is worth noting that gender diversity in other kinds of work teams is not significantly positively related to performance, either. c. 50 Compute answers to three decimal places. b. control Let b. c. opportunity a. d. the opportunity for higher compensation through firm growth, a reduction in managerial employment risk. d. a system of cross-shareholding among firms. Can you catch two birds with one stone? The impacts of nominating b. d. The gap in compensation between CEOs in public and private companies is in-creasing. Whats going on here? 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). Some research suggests, for example, that gender-diverse boards make fewer acquisitions than all-male boards (. Companies in our research with a digitally savvy board had 38 percent higher revenue . b. headed by outside directors. a. A recent study, of board. 48 b. a. firms with unethical top executives d.a poison pill. 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. increased diversification of the firm. a. c. the board is homogenous in composition. Managers in the U.S. receive ____ compensation than managers in the rest of the world. c. the corporation has greatly exceeded perform-ance expectations. Research suggests that boards of directors perform betterif a. the CEO is also the chairperson of the board ofdirectors. b. the number of stockholders and total percentage of shares they own. The directors are all outsiders, experienced, and run their own successful firms. b. executive compensation that is primarily based on long-term performance. After all, both male and female board members are likely to be selected for their professional accomplishments, experience, and competence. a. greenmail. Our foremost conclusion is that there is no cumulative, zero-order evidence of long-term performance declines for firms that have more females in their upper echelons (as CEOs or TMT members). Write the statements in symbolic form . 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The relationship was statistically significant suggesting it wasnt a chance effect but it was tiny. Mr. Abercrombie is con-sidering expanding his consulting practice overseas. d.independence of the committees on the firm's Board of Directors. a. setting the option strike price substantially higher than the current stock price. c. Banks' influence over corporations is increasing. Indeed, this is what Post and Byrons meta-analysis showed. c. the board is homogenous incomposition. One explained raising issues around diversity in the leadership pipeline and his desire to make this a higher board priority: One of our board members who is African-American came up to me afterwards and said, Thank you for bringing that up because I brought it up years ago, not so delicately, and nothing ever happened. So, hes like, Maybe if we get more of us looking at this, itll move the needle., Others similarly commented on the need to serve as a champion for diversity and inclusion on their boards if they wanted to keep the topic front and center. b. small; large Why or why not? b. accounting firms are forbidden from providing both auditing and consulting services to clients. c. lower levels of product diversification. a. 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. We think this happens because female board appointments are anything but gender neutral. a. safer strategies with greater diversification for the firm. destination. b. the board includes employees as voting members. Differing views between board members act as a governance mechanism, preventing radical decisions from being made. b. defense tactics are opposed by institutional investors. "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? As one long-time board director described it: The problem is how boards get formed and how you fill vacancies. When and Why Diversity Improves Your Board's Performance Conventional wisdom says gender diversity in the corporate boardroom improves company performance. d.the board of directors. c. related Requiring that the directors own stock in the company. b. internal auditing scrutiny has improved and there is greater trust in financial report-ing. b. the board includes employees as voting members. The CEO and the top executives successfully fended off the takeover and are concentrating on strategies to improve the performance of the firm. High-performing boards: What's on their agenda? | McKinsey c. excessive management compensation. d. the head of contract services for the Marines. The average correlation between board gender diversity and firm accounting performance, Post and Byron found, was .047. d.more variable. 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 ). a. usually on the verge of bankruptcy. b. the addition of outside directors to the board. a. generate free cash flows, reduce the risk of total firm failure b. the addition of outside directors to the board. d.a silver handshake. a. generate free cash flows, reduce the risk of total firm failure Consequently, the board has decided on an incentive plan that involves payout based on the firm's performance five years in the future. The Sarbanes-Oxley Act requires all of the following EXCEPT: c. lower In a study of 1,069 leading firms across 35 countries and 24 industries, we found that gender diversity relates to more productive companies, as measured by market value and revenue, only in . ____ is an important influence in Japanese corporate governance structures. 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). Chapter 10 (Multiple Choice) Flashcards | Quizlet a. increases shareholder value significantly. b. increased diversification of the firm. But are investors walking the walk on board diversity? Which of the following is NOT an internal governance mechanism? 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). The decisions made by top-level managers are typically complex and nonroutine. a. unsubstantial profits a. banks One shared: I have some influence, and Im trying to exert my influence.. Does Gender Diversity on Boards Really Boost Company Performance? Rigorous, academic studies of CEO gender and company performance tell much the same story as rigorous, academic studies of board gender diversity and company performance do. Innovation The problem is that there is scant evidence that women directors are much different from men when it comes to their approach or experiences especially when they have similar educational and professional backgrounds. Find the area bounded by the graphs of the indicated equations over the given intervals (when stated). Evidence that board diversity benefits firms, however, has been mixed. Consider two recent meta-analyses that have been conducted to summarize prior research on the topic. c. reduce the risk of total firm failure, reduce their total portfolio risk c. defense tactics are typically ineffective in deterring the takeover. The Chinese governance system has been moving towards the Western model in recent years. One board member shared: We look at diversity in a lot of different ways experience, age, ethnicity, gender, etc.. "Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(an) ____ director. b. increasing the concentration of ownership of large U.S. firms. a. decision making responsibility to a second party. In order to limit Mr. Leagreet's power, the board of directors plans to a. going to actively defend their firm from takeover attempts. a. "If the market for corporate control were efficient as a governance device, then only ____ would be targets for takeovers. d.reflected in the price of the stock. Increases in board diversity may signal to investors that the firm is motivated by social goals and cares less about maximizing shareholder value.
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