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Q:
(p. 99) The board of directors can secure its independence by permitting one individual to function as both, the chief executive officer of a company and the chairperson of its board.
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(p. 99) By permitting one individual to function as both the chief executive officer of a company and the chairperson of its board, the board is given the benefit of leadership from someone who is in touch with the inner workings of the organization.
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(p. 99) The argument in favor of merging the roles of the chairperson of the board and the chief executive officer is one of efficiency.
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(p. 97) By merging the roles of the chief executive officer and the chairperson of the board, the oversight provided by the board of directors is magnified.
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(p. 97) The Sarbanes-Oxley Act of 2002 incorporates the "comply or else" approach to corporate governance.
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(p. 97) The "comply or else" methodology is more aggressive than the "comply or explain" methodology.
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(p. 97) The "comply or explain" methodology refers to the set of guidelines that requires companies to abide by a set of operating standards or face stiff financial penalties.
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(p. 97) The "comply or explain" guideline proved to be an effective deterrent to corporate financial scandals.
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(p. 97) The "comply or else" guideline gave companies the flexibility to comply with governance standards or explain their noncompliance in their corporate documents.
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(p. 97) The Cadbury report argued for a guideline of "comply or else," which required companies to abide by a set of operating standards or face stiff financial penalties.
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(p. 97) The King II report emphasized the need for companies to adopt an exclusive approach to corporate governance instead of an inclusive one.
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(p. 96) The triple bottom line proposed by the Kings II report recognizes the economic, environmental, and social aspects of a company's activities.
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(p. 96) The King II report formally recognized the need to move the stakeholder model forward and to consider a triple bottom line instead of a single bottom line of profitability.
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(p. 96) The King I report failed to recognize the involvement of all the corporation's stakeholders in the efficient and appropriate operation of the organization.
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(p. 96) The King Report on Corporate Governance incorporated a code of corporate practices and conduct that looked beyond the corporation itself, taking into account its impact on the larger community.
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(p. 96) The Cadbury report on corporate governance dealt exclusively with external governance.
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(p. 96) The corporate governance committee of a company oversees compliance with the company's internal code of ethics as well as any federal and state regulations on corporate conduct.
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(p. 96) The corporate governance committee is staffed by members of the board of directors and specialists.
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(p. 95) Typically, the compensation package of the CEO and other senior executives consists of a base salary, performance bonus, stock options, and other perks.
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(p. 95) The main responsibility of the compensation committee is to set the compensation for all the employees of the organization, including its outside contractors.
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(p. 95) Independent or outside directors are not eligible to be a part of the compensation committee.
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(p. 95) The strategic business unit of an organization is responsible for monitoring the financial policies and procedures of the organization.
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(p. 95) Members of the board of directors are not eligible to be a part of the audit committee.
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(p. 95) Creditors, suppliers, and professional consultants represent the inside members of the board of directors.
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(p. 94) The board of directors comprises a group of individuals who oversee the governance of an organization.
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(p. 94) Corporate governance does not impact the efficiency of financial markets.
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(p. 94) Board members are not accountable to the company and its shareholders.
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(p. 94) Corporate governance is concerned with how well an organization meets its obligations to its stakeholders.
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(p. 94) The stakeholders of a company include its customers, its vendor partners, state and local entities, and the community in which it conducts its business operations.
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(p. 94) Corporate governance is the system by which business organizations are directed and controlled.
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(p. 104) Does a commitment to good corporate governance affect a company's profitability?
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(p. 97) Explain the "comply or explain" guideline. Why did the "comply or else" policy come into force?
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(p. 96) In what way did the King I approach differ from the Cadbury approach?
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(p. 95) What roles do the audit committee and compensation committee of an organization play in ensuring good governance?
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(p. 94) What is corporate governance? Why is it important?
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(p. 103) Corporate governance is about managers fulfilling a _____ responsibility to the owners of their companies.
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(p. 100) Running a company of any size effectively requires the board of directors to work with the _____, making constant evaluations of risk-versus-reward scenarios together.
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(p. 79) Explain the practice of making a company's operations "carbon neutral."
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(p. 78-79) Discuss the difference between ethical, altruistic, and strategic types of corporate social responsibility (CSR).
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(p. 72) Depending on the actions taken by a corporation, some stakeholders will be positively affected and others will be negatively affected. Explain.
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(p. 71-72) Differentiate between the instrumental approach and the social contract approach to corporate management.
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(p. 70) Explain corporate social responsibility and the assumption on which it operates.
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(p. 81) The _____ was created in November 2006, when the Deutsche Bank teamed up with more than a dozen investment banks and five carbon-trading organizations in Europe to promote the standardization of carbon trading on a global scale.
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(p. 79) One of the newest and increasingly questionable practices in the world of corporate social responsibility (CSR) is the notion of making operations "_____" in such a way as to offset whatever damage is being done to the environment through greenhouse gas emissions by purchasing credits to balance out emissions.
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(p. 79) _____ corporate social responsibility (CSR) runs the greatest risk of being perceived as self-serving behavior on the part of the organization.
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(p. 79) _____ corporate social responsibility (CSR) encompasses philanthropic activities targeted toward programs that generate the most positive publicity or goodwill for the organization.
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(p. 78) The _____ approach to corporate social responsibility (CSR) argues that philanthropic initiatives are authorized without concern for the corporation's overall profitability.
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(p. 78) Critics have argued that, from an ethical perspective, _____ CSR is immoral since it represents a violation of shareholder rights if they are not given the opportunity to vote on the initiatives launched in the name of corporate social responsibility.
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(p. 78) _____ CSR is a philanthropic approach to corporate social responsibility (CSR) in which organizations underwrite specific initiatives to give back to the company's local community or to designated national or international programs.
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(p. 78) When organizations pursue a clearly defined sense of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities to their local community and society as a whole, and their ethical responsibilities to do the right thing for all their stakeholders, they are following an _____ corporate social responsibility (CSR) initiative.
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(p. 78) _____ CSR is the most legitimate type of corporate social responsibility (CSR).
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(p. 77) Many companies' annual reports reflect a _____ approach that includes updates on their social and environmental activities in addition to their bottom-line financial performance.
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(p. 73) According to Joseph F. Keefe, _____ is a major trend behind the corporate social responsibility phenomenon that does not allow companies to conceal their business practices.
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(p. 73) The companies that support the policy of _____ believe that doing what's best in the long-term interest of the customer is ultimately doing what's best for the company.
Q:
(p. 72) According to the modern social contract approach, by recognizing stakeholders rather than just their _____, corporations must maintain a long-term perspective than just delivering quarterly earnings numbers.
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(p. 72) The _____ refers to the perspective that a corporation has an obligation to society over and above the expectations of its shareholders.
Q:
(p. 71) The _____ approach to corporate management is considered simplistic because it focuses on the internal world of the corporation itself and assumes that there are no external consequences to the actions of the corporation and its managers.
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(p. 71) According to Milton Friedman, it would be unethical for a corporation to do anything other than deliver the profits for which its investors have entrusted it with their funds in the purchase of shares in the corporation. This illustrates the _____ to corporate social responsibility.
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(p. 71) _____, the Nobel Prize-winning economist, argued about the instrumental approach that it would be unethical for a corporation to do anything other than deliver profits for its investors.
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(p. 71) The _____ approach to corporate management states that the only obligation of a corporation is to maximize profits for its shareholders.
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(p. 70) _____ implies that an organization operates with an awareness of its obligation to the society.
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(p. 70) _____ refers to the actions of an organization that target toward achieving a social benefit over and above maximizing profits for its shareholders and meeting all its legal obligations.
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(p. 70) _____ implies that an organization is responsible for meeting all its legal and social obligations.
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(p. 80) The practices of making a company's operations _____, to offset damage to the environment through their greenhouse gas emissions, was initially developed as a solution for those industries that face significant challenges in reducing their emissions.
A. focus on consumerism
B. achieve economies of scale
C. backward integrated
D. carbon neutral
Q:
(p. 79) _____ is one of the newest and increasingly questionable practices in the world of CSR.
A. Risk management and emergency preparedness
B. Water conservation
C. Positive greenhouse approach
D. Carbon neutral operations
Q:
(p. 79) _____ CSR refers to philanthropic approach to corporate social responsibility in which organizations target programs that will generate the most positive publicity or goodwill for the organization but which runs the greatest risk of being perceived as self-serving behavior on the part of the organization.
A. Altruistic
B. Ethical
C. Economic
D. Strategic
Q:
(p. 78) Bector Airlines supports relief camps in the Republic of Cadmia with donations of both money and employee-donated volunteer hours. It also provides packaged food in times of natural crises such as hurricanes, earthquakes, etc. This is an example of _____ CSR.
A. strategic
B. economic
C. altruistic
D. ethical
Q:
(p. 78) In _____, organizations take a philanthropic approach by underwriting specific initiatives to give back to the company's local community or to designated national or international programs.
A. altruistic CSR
B. strategic CSR
C. ethical CSR
D. economic CSR
Q:
(p. 78) Organizations pursuing a clearly defined sense of social conscience in managing their financial responsibilities to shareholders, their legal responsibilities to their local community and society as a whole, and their ethical responsibilities to do the right thing for all their stakeholders follow a(n) _____ initiative.
A. altruistic CSR
B. strategic CSR
C. ethical CSR
D. economic CSR
Q:
(p. 77) Which of the following is a criticism of the triple bottom-line (3BL) approach?
A. 3BL does not take a holistic view of what constitutes sustainability for the company.
B. 3BL has a narrow view of what constitutes profit for the company.
C. Under the 3BL approach, an organization focuses more on financial goals rather than social and environmental goals.
D. There has been no real evidence of how 3BL can be measured.
Q:
(p. 77) Which of the following illustrates a firm having a triple bottom-line (3BL) approach?
A. Adbel Inc. issues free meal coupon to its employees.
B. Brenerz Enterprises reduces its industrial waste by half and provides cab service for its employees.
C. Brink-T Technologies donates ten percent of its profit to charity, reduces toxic emission from its plants, and has ten percent increase in financial turnovers.
D. Amelia and Lewis Enterprises provides longer maternity leaves and medical insurances for all their employees.
Q:
(p. 77) Which of the following approaches considers a company's social, economic, and environmental impact rather than focusing solely on its financial impact?
A. Just-in-time
B. Double bottom line
C. Social contract
D. Triple bottom line
Q:
(p. 75) Corporations that experiment with corporate social responsibility (CSR) initiatives run the risk of creating adverse results as:
A. the employees feel that they are working for an insincere, uncaring organization.
B. the public sector is considered the best or most appropriate venue for addressing a growing list of social problems.
C. the customers feel ignored since the corporation focuses solely on helping the community.
D. the organization sees the benefit of CSR but does not feel the need to develop the concept.
Q:
(p. 75) Corporate social responsibility initiatives:
A. focus more on profit maximization than customer relationships.
B. do not generate long-term financial gains to the organization.
C. do not always generate immediate financial gains to the organization.
D. focus more on financial gains for the company than legal compliance.
Q:
(p. 73-75) According to Joseph F. Keefe, which of the following is true of the major trends behind the corporate social responsibility phenomenon?
A. Companies easily conceal whatever they do (good or ill) as it will not be known at all.
B. Globalization represents a new stage of capitalist development, this time with public institutions in place to protect society by balancing private corporate interests against broader public interests.
C. Corporations are under increasing pressure from diverse stakeholder constituencies to demonstrate that business plans and strategies are environmentally sound and contribute to sustainable development.
D. In the United States and other developed nations, citizens have the complete confidence in the public sector as the best and most appropriate venue for addressing a growing list of social problems.
Q:
(p. 75) According to Joseph F. Keefe, which of the following is a major trend behind the corporate social responsibility phenomenon?
A. Nationalization
B. Globalization
C. The failure of the private sector
D. The failure of the industrial sector
Q:
(p. 73) According to Joseph F. Keefe, _____ is a major trend behind the corporate social responsibility phenomenon.
A. transparency
B. nationalization
C. failure of the private sector
D. failure of the industrial sector
Q:
(p. 73) The policy of _____ is the premise of corporate social responsibility where doing what's best for the customers translates into what's best for the company in the long run.
A. social contagion theory
B. doing well by doing good
C. social threefolding theory
D. delivering quarterly earnings numbers
Q:
(p. 72) According to Henry Ford II, which of the following is true of corporations?
A. He recognized that corporations' actions do not impact their external environment.
B. He recognized that corporations do not operate in an isolated environment.
C. He recognized that corporations were only economic enterprises and not social institutions.
D. He recognized that corporations have a responsibility to shareholders before stakeholders.
Q:
(p. 72) According to the social contract approach to management, by recognizing _____ and not just shareholders, corporations must maintain a long-term perspective rather than simply delivering quarterly earnings numbers.
A. stakeholders
B. competitors
C. statutory auditors
D. distributors