Alignment of Benefits and Corporate Governance Issues

The video discusses corporate governance issues, focusing on conflicts arising from the roles of officers and directors, compensation misalignments, and improper relationships. It highlights how these factors can lead to conflicts of interest, misaligned incentives, and governance challenges, emphasizing the importance of maintaining separation and objectivity in corporate decision-making.

What is a potential issue when executive officers also serve as directors on the board?

• Increased transparency in decision-making

• Inherent conflicts in decision-making

• Enhanced separation between roles

• Improved daily task execution

Why might a lack of separation between decision-makers and daily task executors be problematic?

• It can influence board decisions negatively

• It ensures better communication

• It reduces the need for a board

• It leads to more efficient task execution

How can directors setting their own compensation lead to conflicts?

• It ensures fair compensation for all employees

• It aligns incentives with long-term goals

• It can misalign incentives towards short-term performance

• It reduces the influence of executive officers

What is a consequence of directors having improper relationships with the corporation?

• Personal gain at the expense of the corporation

• Better alignment of corporate assets

• Enhanced corporate governance

• Increased corporate opportunities

What is a risk of directors being suppliers or purchasers from the corporation?

• It reduces personal gain

• It enhances corporate reputation

• It improves supplier relationships

• It leads to conflicts of interest