The following countries are the focus of corporate governance to international settings, as discussed, except:

Statement 1: Japan and China rely on the government or state as their source of financing

Statement 2: Corporate governance in China may be tilting toward the Western model.

Who is responsible for appointing members to the Vorstand?

Chinese firms with more than 2,000 employees are required to have a two-tiered board structure

It is a group of firms tied together by cross-shareholdings.

Statement 1: Scandals at companies such as Enron, WorldCom, HealthSouth, and Satyam illustrate the negative effects of poor ethical behavior on a firm

Statement 2: It is important to serve the interests of the firm’s multiple stakeholder groups.

Outsiders are individuals who are independent of the firm’s in terms of day to day operation and other relationship.

Large- block shareholders is the total percentage of the firm’s share they own.

Activist Pension Fund is identifying a firm whose performance could be improved and then invest on it

Diversification beyond the shareholders optimum level can result from effective monitoring of managers decision.

Ownership Concentration as a governance mechanism has received considerable interest.

It is an acquisition of a target company by an acquiring firm that is accomplished.

A governance mechanism that seems to align the interest of managers and owners through salaries, bonuses etc.

Concerned with identifying ways to ensure that decisions (especially strategic decisions) are made effectively and that they facilitate a firm's efforts to achieve strategic competitiveness

The relationship exists when one or more persons (the principal or principals) hire another person or persons (the agent or agents) as decision-making specialists to perform a service.

Arises when the goals of the principal (shareholders) don't match the goals of the agent (managers).

Salary, bonus, stock and stock options, long term incentive plans are the components of executive compensation.

A set of potential owners seeking to acquire undervalued firms and earn above-average returns on their investments by replacing ineffective top-level management teams.

Agency relationship exists when one party delegates decision-making responsibility to a second party for compensation.