GRB Exam 3 Practice Questions

Ann Mather, a former executive with Pixar Studios, currently serves on the board of directors of Alphabet, the parent company of Google. An “outside director” on a company’s board of directors:

• cannot chair the board’s audit or compensation committee

• can only serve on one board at a time

• is unlikely to bring a diverse or unique perspective to board discussions and decisions

• worked for the company in the past, but is now retired or with another firm

• has valuable expertise, but limited vested interest (financial stake) in the firm before assuming the role

According to agency theory, what is the primary concern of a board of directors?

• To determine whether or not to pay dividends to stockholders

• To act in the best interests of the corporation

• To make decisions about how to run the day-to-day affairs of the business

• To monitor the decisions made by managers on behalf of the shareholders of the firm

• To bring valuable resources to the firm

Which of the statements below best exemplifies a change that is needed for corporate governance to support a company’s CSR more effectively?

• The Board of Directors provides oversight through committees dedicated to financial audits and risk assessment.

• The Board of Directors for Company X compensates the CEO based on quarterly return on investment (ROI) results.

• The Board of Directors regularly receives triple-bottom-line performance information.

• Each member of the Board of Directors for Company X limits his/her tenure to no more than 7 years on the Board.

Prior to his resignation from the Chairman role, Elon Musk held both the CEO and Board Chairman positions at Tesla. More than half the firms listed on S&P 500 have CEOs who also hold chairperson positions on the board. This practice is known as:

• Chairman duty

• CEO duality

• CEO interlock

• Board independence

• Golden parachute

Which of the following lists the four major components of the UN Global Compact?

• Human Rights, Labour, Environment, Civil Liberties

• Human Rights, Labour, Environment, Anti-Corruption

• Human Rights, Environment, Anti-Corruption, Fair Pay

• Human Rights, Child Labour, Environment, Anti-Corruption

A small promotional company in Mexico, Casa Xavier, prints logos and custom messages on promotional items such as water bottles, pens, bags, and planners, among many other things. Casa Xavier has recently adopted the GRI standards. While international standards are more commonly found in larger firms, there are many reasons why small firms can benefit from them as well. Which of the following is not a reason why a small company like Casa Xavier might adopt the standards?

• Using the GRI may help the company secure contracts with large multinational firms that use or require the standards.

• The GRI provides international certification that Casa Xavier is dedicated to responsible production.

• The information gathered and reported can provide insight to Casa Xavier into how to run the business more efficiently.

• The GRI formalizes the company’s reporting.

Today's employees are looking for

• competitive pay and benefits.

• opportunities for professional growth.

• meaningful work.

• all of the above.

What are rights provided by law?

• Inherent rights

• Statutory rights

• Enterprise rights

• Negotiated rights

The idea that the relationship between a worker and employer is voluntary and can be terminated at any time, by either party, is the

• employment-at-will doctrine.

• due process principle.

• corporate governance system.

• arbitrary employment doctrine.

Which of the following is not a requirement of a due process system?

• It must follow rules and not be arbitrary.

• It must be well documented.

• It must apply to all employees.

• It must be perceived as equitable.