corporate governance correct answers the set of mechanisms used to manage relationships among stakeholders and to determine and control the strategic direction and performance of organizations
agency relationship correct answers exists when one party delegates decision making responsibility to a...
MGT 499 Chapter 10(100% Verified)
corporate governance correct answers the set of mechanisms used to manage relationships among
stakeholders and to determine and control the strategic direction and performance of organizations
agency relationship correct answers exists when one party delegates decision making responsibility to a
second party for compensation
managerial opportunism correct answers the seeking of self interest with guile (cunning or deceit);
opportunism is both an attitude (an inclination) and a set of behaviors (specific acts of self interest)
managerial employment risk correct answers the risk of job loss, loss of compensation, and loss of
managerial reputation
agency costs correct answers the sum of incentive costs, monitoring costs, enforcement costs, and
individual financial losses incurred by principals because governance mechanisms cannot guarantee total
compliance by the agent
ownership concentration correct answers the number of large block shareholders and the total percentage
of the firm's shares they own
large block shareholders correct answers typically own at least 5 percent of a company's issued shares
institutional owners correct answers financial institutions such as mutual funds and pension funds that
control large block shareholder positions
board of directors correct answers a group of elected individuals whose primary responsibility is to act in
the owners' best interests by formally monitoring and controlling the firm's top level managers
insiders correct answers active top level managers in the company who are elected to the board because
they are a source of information about the firm's day to day operations
related outsiders correct answers have some relationship with the firm, contractual or otherwise, that may
create questions about their independence, but these individuals are not involved with the corporation's
day to day activities
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