a. Satyam's stock price suffered a significant decline. 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. b. company unions which are a type of governance system. c. German firms will not be interested in Mr. Abercrombie''s services because the German system of decision-making is based on authority and few conflicts emerge. The board has been successful in reducing the percentage of CEO pay that is composed of stock options. The slow progress on gender diversity has frustrated policymakers, industry groups, and institutional investors, many of whom have publicly advocated for inclusion of women and minorities among the top ranks of management. Couple times it hasnt been but someone will just say, Hey thats not very respectful, you know the way you just said that., Several interviewees told us that boards that value open communication are more likely to engage in conversations about diversity even those that believe they still have a long way to go. a. lead independent d.the board of directors. b. riskier strategies with more focused diversifica-tion for the firm. d.Individualism. We dont know exactly why this theoretical logic doesnt hold among corporate boards. The CEO of Alta Corp. is dismayed by a lack of effort and insights his directors provide during board meetings. a. reasonably compensating a CEO. d.the board of directors. d.over-valued firms. b. banks and other lending institutions that have provided major financing to the firm. c. lower d. a poison pill. Annual U.S. beer production data is given below. c. crossing the palm with silver. c. the government. Executive compensation is a governance mechanism that seeks to align managers' and owners' interests through all of the following EXCEPT c. public pension funds c. Institutional investors disapprove of long-term executive incentive plans and they may sell their blocks of stock in CamCell. Meta-analyses linking team gender diversity to team performance (e.g., Bell et al., 2011) reach much the same conclusion as meta-analyses linking board gender diversity to firm performance that is, the relationship between team gender diversity and team performance is tiny. A growing body of research including studies by McKinsey & Company has proven that companies with more women in senior executive and board roles have advantages over those that dont.. d. outside directors own significant equity in the organization. An executive's decisions often affect firm performance only over the long run. c. lower The fact that a hostile takeover has occurred is proof that the firm was un-der-performing. The authors conclude the following: Undoubtedly, breaking the glass ceiling matters. But firms expecting a financial performance boost simply by increasing female board representation may end up disappointed. d. prevented by the Sarbanes-Oxley Act from owning more than 50% of the stock of any one firm. 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. "The New York Stock Exchange requires that the audit committee be: Results of numerous academic studies of the topic suggest that the presence of more female board members does not much improve or worsen a firms performance. b. strengthening the internal management and accounting control systems "Which of the following reasons would NOT explain the difficulty of determining appropriate executive compensation? Another recent study by Jonson et al. The market for corporate control has collapsed with the economic crises in Japan. a. organizational performance. d. reduce their employment risk, increase the company's value, Agency costs reflect all of the following EXCEPT ____ costs. The average correlation between board gender diversity and firm accounting performance, Post and Byron found, was .047. b. headed by outside directors. a. usually on the verge of bankruptcy. c. require Mr. Leagreet to personally certify the firm's financial reports. c. executive compensation systems. Boards that want to maximize their effectiveness need to do more to ensure that different perspectives are regularly elicited and integrated into the boards work. a. going to actively defend their firm from takeover attempts. Conventional wisdom says gender diversity in the corporate boardroom improves company performance. Consider two recent meta-analyses that have been conducted to summarize prior research on the topic. c. liable for any illegal actions by the top management team. c. 50 c. Competition a. Mr. Abercrombie will have a large market in Japan because the culture highly val-ues consensus decision making. c. the qualifications and experience of the CEO. 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). MGMT Chapter 10 Flashcards | Quizlet Many popular press articles and fund managers make this claim, citing studies by consulting firms, information providers and financial institutions, such as McKinsey, Thomson Reuters and Credit Suisse. shipping point, and $22,000 of goods sold to Alvarez Company for$30,000, f.o.b. a. management structures related to total quality management systems. Indeed, this is what Post and Byrons meta-analysis showed. b. the addition of outside directors to the board. James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. This suggests that gender diversity on the board explains about two-tenths of 1% of the variance in company performance. Diversity, Inclusion, and Belonging Course. b. ensure that the interests of top-level managers are aligned with the interests of shareholders. Older boards are better boards, so beware of diversity targets c. the employees directly involved in the wrongdo-ing. a. increases. The two meta-analyses reached very similar conclusions, despite the differences in the underlying studies (140 studies vs. 20, etc.). d. the board of directors. In other words, investors seem to be penalizing, rather than rewarding, companies that strive to be more inclusive. d.riskier strategies with greater diversification for the firm. c. related Chapter 10 (Multiple Choice) Flashcards | Quizlet 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. d. more variable, The longer the focus of managerial incentive compensation, the greater the ____ top-level man-agers. The best evidence comes from a recent meta-analysis of 146 studies (Jeong and Harrison, 2017). c. uncontrollable events may affect the long-term performance of the firm. c. reduce the risk of total firm failure, reduce their total portfolio risk The board of directors and firm innovation: A meta-analytical review Further, there is no evidence available to suggest that the addition, or presence, of women on the board actually causes a change in company performance. Klein is also the vice dean of the Wharton Social Impact Initiative. Mr. Abercrombie has had striking success in reducing conflict and hostility among directors and allowing boards to develop more cohesiveness. "Managerial employment risk is the: Rigorous, peer-reviewed studies suggest that companies do not perform better when they have women on the board. Let a. this delays their compensation for present actions to future years. a. the roles of CEO and chairperson of the board of directors are usually combined. However, rigorous, peer-reviewed academic research paints a different picture. "An agency relationship exists when one party delegates: d.is eliminated. b. All rights reserved. b. government auditors. c. Electing an lead director. d.a silver handshake. Board diversity matters but concentrating on only one form of diversity isnt enough. Nor are they any less profitable, for that matter. Byron and Post (2016) meta-analyzed the results of 87 studies and found that board gender diversity is weakly but significantly positively correlated with CSR. Similarly, the relationship of top management team (TMT) gender diversity and company performance is statistically significant but very small. Innovation The CEO's behavior may be indication of: At a meeting over dinner, the top management team agrees to go to the board of directors with a proposal for: a. a uniform compensation plan for all corporate executives, U.S. and foreign alike. Which of the following statements is true? d. a silver handshake. What difference can Archibald expect? c. Borders' decision to increase the size of its board 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? As ownership of the corporation is diffused, shareholders' ability to monitor managerial deci-sions b. enforcement d. The CEO was a recipient of the Golden Peacock Award for Corporate Governance. Managers may decide to invest ____ in products that are not associated with the firm's current lines of business to increase the firm's level of diversification and decrease their employment risk. d.curvilinearly related to, "The longer the focus of managerial incentive compensation, the greater the ____ top-level managers. On January 1, California law said that all locally headquartered publicly traded companies must have at least one female director by 2020. One interviewee commented on how the board as a whole believed in the importance of diversity, but longer-term board members still struggled to understand its value. a. Compensation of CEOs in both private and public companies is being tied more closely to observable performance goals. d.of the focus on stewardship-management in German firms rather than the financial perform-ance focus of U.S. firms. d.has weakened the effect of other governance mechanisms. a. banks The CEO genuinely seeks their greater involvement. b. selecting new CEOs. Do companies with women on the board perform better than companies whose boards are all-male? High-performing boards: What's on their agenda? | McKinsey a. greenmail. The Vorstand is elected by the firm's employees. d.governmental relations. The team members are becoming concerned about the security of their jobs at Sierra Infusion. Boards of directors are now becoming more involved in - Course Hero b. requiring that outside directors be former executives of the firm. People believed that the company that appointed Marilyn cared more about improving the social performance of the firm and less about maximizing shareholder value, compared to the company that appointed Jack. But while many prescriptions for improving corporate governance focus on the structure of. 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. b. the number of stockholders and total percentage of shares they own. c. is so aggressive that boards of directors have become overly cautious. d. The CEO and top executives should not consider their jobs secure. b. typically under-performing their industry. What other expenses might it expect? 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. An agency relationship exists when one party delegates 5 d. the proportion of insiders on the board of directors. "Managers in the U.S. receive ____ compensation than managers in the rest of the world. ____ is an important influence in Japanese corporate governance structures. c. Banks' influence over corporations is increasing. d.prevented by the Sarbanes-Oxley Act from owning more than 50% of the stock of any one firm. d.government agencies. This isnt a strong relationship, but its a good bit stronger than the relationship between board diversity and corporate performance. c. the government. c. pressure the board of directors to reprice their stock options. Governance is used to establish order between parties whose interests may be in conflict. "Shareholder value is: d. a variety of compensation plans for executives of foreign subsidiaries. d.consulting accounting advisors to make sure that the plan transfers wealth to the CEO without immediately appearing on the balance sheet of CyberScope. d. made up of CPAs with auditing experience. d. over-valued firms. a. significant pay reductions for many corporate CEOs b. a weak board of directors. b. large institutional investors control large blocks of stock. b. increasing the concentration of ownership of large U.S. firms. d. a system of cross-shareholding among firms. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. 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.a variety of compensation plans for execu-tives of foreign subsidiaries. It signals an end, or at least the beginning of an end, to gender exclusivity in firm leadership. c. requiring outside directors to own significant equity stakes in the firm. a. a golden parachute. "Institutional owners are: What circumstances would most likely have initiated this proposal? a. reasonably compensating a CEO. New Report: Companies With Diverse Boards Out Performed Their Peers For example, companies with more than 30 percent . Working in a group, discuss how the New Therapy Company can meet the deadline and still ensure a high quality of care. Which of the following is FALSE about corporate governance in China? Are there further consequences for firm performance if females join a firms upper echelons? b. appoint another individual as chairperson of the board of directors. Innovation 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. "Which of the following is TRUE of trends in Japan's corporate governance structure? b. defense tactics are opposed by institutional investors. Research suggests that boards of directors perform - Course Hero Besides the name of the director, the press releases were identical.