Corporate Governance

…………….consider duties of the audit committee

• setting executive frameworks, measures, and rules approved by the board

• review the company internal controls and draw-up a written report on the committee’s opinion and recommendations about such controls.

• Both

• None

Which one of the following statements is correct?

• The free-rider problem prevails in firms that are widely held. .

• A large shareholder may be a solution to the free-rider problem.

• The free-rider problem may result in a lack of shareholder monitoring of the management.

• All of the above.

Originate from the shares of the bank’s customers deposited with the banks is

• Dual –class shares

• Proxy votes

• None

Which one is considered control environment as a pillar of ECCG.

• Remuneration committee.

• Nomination committee.

• The external auditors.

• None

Concentrated ownership and strong control

• Create strong monitoring incentives

• Low liquidity and reduced takeover probability

• Both

• None

Strong control and dispersed ownership can be achieved by

• dual-class shares

• proxy votes.

• All of the above

• ownership pyramids.

For moral hazard to exist, there needs to be

• symmetry of information

• asymmetry of information.

• the possibility of complete contracts.

• None of the above

Issued by some continental Europe firms , but also American firms , have two classes of shares

• Voting coalition

• Proxy votes

• All of the above

• Dual-class shares

Dispersed ownership has major advantages

• Increased liquidity resulting in a lower cost of capital

• The exposure to hostile takeovers putting pressure on managers to perform will

• Both A and B

• None

Which one of the following statements is correct?

• In the presence of weak control and dispersed ownership, the classic corporate governance problem, i.e. the principal-agent problem, prevails

• The main corporate governance problem under strong control and dispersed ownership is the expropriation of the minority shareholders by the large shareholder

• In the presence of weak control and concentrated ownership, the classic corporate governance problem, i.e. the principal-agent problem, prevails

• All of the above