research suggests that boards of directors perform better if

Despite popular press accounts that suggest that teams high in gender diversity outperform those composed only of men or only of women, rigorous research does not support this conclusion. a. ownership concentration. Women should be appointed to boards for reasons of gender equality., Women Directors and Other Dimensions of Company Performance. Consensus d. has weakened the effect of other governance mechanisms. d.companies in mature, slow-cycle industries. For example, a few years ago, Apples shareholders voted against recruiting more minorities to its top management team, after the company argued that such a measure would be overly restrictive. Increases in board diversity may signal to investors that the firm is motivated by social goals and cares less about maximizing shareholder value. d. the CEO is also the chairperson of the board of directors. a. ATP has been the initiator of several hostile takeovers in the last two years. Ambrose Bierce, the CEO of DictionAry, has been paid a lump sum amounting to three years' salary because DictionAry has been bought in a hostile takeover by its main competitor. If male and female board members are fairly similar in their values, experience, and knowledge, the addition of women to an all-male board may not increase the boards cognitive variety as one might expect at first blush. All of the following are unintended consequences of the Sarbanes-Oxley Act EXCEPT: d. frozen assets, Product diversification provides two benefits to managers that do not accrue to shareholders: ____ and ____. We also asked them to evaluate the competence of the new board member. Companies that engage in CSR, or intend to do so, may be particularly inclined to appoint women to the board. In this opinion piece, Wharton management professor Katherine Klein summarizes academic research on the topic and discusses the possible reasons and implications for these surprising findings. "The ownership of major blocks of stock by institutional investors have resulted in all of the following EXCEPT: b. strengthening the internal management and accounting control systems a. the strategic decision making process. One interviewee commented on how the board as a whole believed in the importance of diversity, but longer-term board members still struggled to understand its value. It is also important to consider recruiting from outside of the CEO and CFO pool to increase board diversity. b. ensure that the interests of top-level managers are aligned with the interests of shareholders. If so, how and when? | Brian Berkey. The women named to corporate boards may not in fact differ very much in their values, experiences, and knowledge from the men who already serve on these boards. b. d. requiring that outside directors be truly objective by having no ownership interest in the firm. d.For legal reasons, the board cannot consider the interests of CalPERS over the interests of its top executives. b. firms earning above-average returns (Statistical significance depends in part on sample size. "The use of excessively-generous stock options for executive compensation has been slowed in the past couple years for all of the following reasons EXCEPT: "Archibald Smith has moved from an upper-middle management job at Chromatic Array, Inc., to a similar position with Pixilair Corporation. a. reasonably compensating a CEO. What circumstances would most likely have initiated this proposal? c. often performing above their industry averages. Similarly, after promising to address board diversity, Skechers explained their decision not to nominate a female director by saying that the firms primary focus is on maximizing shareholder value. In May 2019, the company nominated their first female board member following the enactment a law requiring California companies to have at least one woman on their board. "The separation between firm ownership and management creates a(n) ____ relationship. b. insuring that the strike price value of the options can be lowered if the organizational environ-ment becomes more risky. c. Banks' influence over corporations is increas-ing. The separation between firm ownership and management creates a(n) ____ relationship. d.tying the compensation of CEOs to measur-able financial criteria. The board of directors of CamCell, Inc., wishes to design a CEO compensation plan that will align the personal interests of the CEO with the interests of the shareholders in long-term firm performance. Even if the women named to corporate boards are different from the men on these boards, they may not speak up in board conversations and they may lack the influence to change the boards decisions. This is in fact what we found. The two meta-analyses reached very similar conclusions, despite the differences in the underlying studies (140 studies vs. 20, etc.). b. likely to gain financially if their employing firm is taken over by another. Ambrose received: d. The compensation committee may not have comprehensive firm performance data. There was, however, a difference in the perceived goals of the company. Implementing a director appraisal system. c. excessive management compensation. a. high executive turnover. Pletzer, Nikolova, Kedzior, and Voelpel (2015) took a different approach, conducting a meta-analysis of a smaller set of studies 20 studies that were published in peer-reviewed academic journals and that tested the relationship between board gender diversity and firm financial performance (return on assets, return on equity, and Tobins Q). b. Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. b. accounting firms are forbidden from providing both auditing and consulting services to clients. To test this theory, we conducted an experiment with 193 alumni and current students of a top-tier international business school. b. inside c. lower Hed speak like, without taking any breaths for two hours on end., But even in hierarchical cultures, the CEO, Chairman, or lead director can help to create a more open communication environment. "Managers in the U.S. receive ____ compensation than managers in the rest of the world. When executives have ownership positions or stock options with their employing firm, they are: Research: When Gender Diversity Makes Firms More Productive Given the findings of research on board gender diversity, one might wonder about the effects on company performance of CEO gender and top management team gender diversity. b. But firms expecting a financial performance boost simply by increasing female board representation may end up disappointed. a. Mr. Abercrombie will have a large market in Japan because the culture highly val-ues consensus decision making. c. incentives for d.75. Members of these boards believe that both their expertise and willingness to learn is recognized and incorporated into the boards work. b. the appointment by EasyJet of a new chairman of the board All rights reserved. a. management structures related to total quality management systems. b. the board includes employees as voting members.c. q:q:q: The air co nditioner is working. A 2015 meta-analysis of 140 research studies of the relationship between female board representation and performance found a positive relationship with accounting returns, but no significant relationship with market performance. c. salary. When individuals are minorities, tokens, or outliers in a group, they often self-censor, holding back from expressing beliefs and opinions that run counter to the beliefs and opinions of the majority of the group. James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. The average correlation between CEO gender and long-term financial performance is .007. Do companies with women on the board perform better than companies whose boards are all-male? ____ is an important influence in Japanese corporate governance structures. b. the board includes employees as voting members. Board diversity matters but concentrating on only one form of diversity isnt enough. And the greater the cognitive diversity, the better the board is at solving complex problems and coming up with novel solutions. c. focusing attention on ineffective boards of directors. c. is so aggressive that boards of directors have become overly cautious. They also raised. c. financial institutions such as mutual funds and pension funds that control large-block shareholder positions. a. mandating that all outside directors be drawn from government or academia rather than industry. d. over-valued firms. Nor do they perform worse. Which of the following statements is likely to be TRUE? b. government auditors. To achieve cognitive diversity, then, we should focus on dimensions of diversity other than gender. A primary objective of corporate governance is to. Our latest report shows not only that the business case remains robust but also that the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time. d. prevented by the Sarbanes-Oxley Act from owning more than 50% of the stock of any one firm. destination. c. CEOs and CFOs must personally certify the company's financial reports. A majority of the directors are concerned that while Mr. Leagreet has been re-sponsible for the firm's earning above-average returns, he has been displaying a tendency to-ward personal extravagance at the firm's expense. d. establishing and using formal processes to evaluate the board's performance. b. banks and other lending institutions that have provided major financing to the firm. b. a weak board of directors. Earn badges to share on LinkedIn and your resume. Which of the following statements is most likely to be TRUE? "Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(an) ____ director. "Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. Managers in the U.S. receive ____ compensation than managers in the rest of the world. Firms should be selecting the very best directors from the largest talent pool possible, and excluding women from that pool to avoid market penalties would be counterproductive. c. increased shareholder participation in decision making. a. generate free cash flows, reduce the risk of total firm failure Both the Pelzer purchase and the Alvarez sale were in transit at year-end. d. the head of contract services for the Marines. The decisions made by top-level managers are typically complex and nonroutine. c. opportunity The gap between CEO pay and the pay of other top executives at Chromatic was significantly larger than at Pixilair. a. a. increases shareholder value significantly. This plan will be very attractive in luring candidates for the CEO position. An executive's decisions often affect firm performance only over the long run. c. lower c. the qualifications and experience of the CEO. a. going to actively defend their firm from takeover attempts. a. governance d. is eliminated. b. likely to gain financially if their employing firm is taken over by another. a. lead independent The repurchase at a premium of shares of stock that have been acquired by the aggressor firm in a hostile takeover in exchange for an agreement that the aggressor will no longer target the com-pany for takeover is called c. the number of outside directors and the parties they represent. "Executive compensation is a governance mechanism that seeks to align managers' and owners' interests through all of the following EXCEPT: b. institutional shareholders b. control The average correlation between board gender diversity and firm accounting performance, Post and Byron found, was .047. c. elevation of foreign executive compensation to U.S. levels. Rigorous, academic studies of CEO gender and company performance tell much the same story as rigorous, academic studies of board gender diversity and company performance do. c. the corporation has greatly exceeded perform-ance expectations. d. the opportunity for higher compensation through firm growth, a reduction in managerial employment risk. c. A number of factors intervene between top-level management decisions and firm performance. Who is ultimately responsible for the corporate climate that resulted in this wrongdoing? One suggested explanation for this puzzling finding is that the stock market is biased and believes that women are not as competent when making business decisions. They are more a function of general market conditions. "Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. The team members are becoming concerned about the security of their jobs at Sierra Infusion. Let b. internal auditing scrutiny has improved and there is greater trust in financial report-ing. b. Japanese keiretsu are c. Banks' influence over corporations is increasing. b. may not have a direct effect on firm performance. "Institutional owners are: Ditto for studies of the gender diversity of the top management team. By studying outcomes that are more proximal or immediately related to board decision-making than is company performance, researchers may shed more light on when, whether, and how diverse boards differ from all-male boards. The decisions made by top-level managers are typically complex and nonroutine. In the U.S., the fundamental goal of business is to, In the U.S., a firm's key stakeholder(s) is(are) the. c. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities a. available to comment to external analysts. It would be wrong to say that we are 100% of where we ought to be. c. public pension funds d.Individualism. While its possible that the addition of women to the board causes an increase in CSR, existing research cannot prove it. Does this mean that we should not promote women to corporate boards? A recent study, of board. The board of directors and firm innovation: A meta-analytical review c. excessive management compensation. 5 47; Gender-diverse boards also tend to adopt more progressive organizational management practices, such as work-life support programs, which increase employee satisfaction. Which of the following statements is true? If this was the case, board diversity could have no effect on operating performance but still have a negative effect on market returns. However, rigorous, peer-reviewed academic research paints a different picture. The CEO's behavior may be indication of: d. a system of cross-shareholding among firms. b. the addition of outside directors to the board. b. the market for corporate control. "The New York Stock Exchange requires that the audit committee be: Research suggests that boards of directors perform - Course Hero I dont like that I said, If you think my only value is the fact that Im a female, I cant add value to your board., Other interviewees similarly addressed concerns for tokenism: I think that theres so much conversation right now about adding more females to boards and everyone feels like, Okay if we have ten board members, we should recruit three women. But I think we need to make sure they have the right skills. d.always outperforming their industry. Cultivate trust and encourage the board to be involved in strategy. d.a variety of compensation plans for execu-tives of foreign subsidiaries. a. boards of directors. Working in a group, discuss how the New Therapy Company can meet the deadline and still ensure a high quality of care. Monitoring by shareholders is usually accomplished through c. the employees directly involved in the wrongdo-ing. Besides the name of the director, the press releases were identical. d. Banks have less influence on the governance of German corporations than they do on U.S. corporations. Some research suggests, for example, that gender-diverse boards make fewer acquisitions than all-male boards (. We interviewed 19 board directors (15 women and four men) to learn whether and how corporate boards were benefiting from diversity. b. defense tactics are opposed by institutional investors. Other research has found no relationship to performance at all. b. long-term incentives such as stock options. c. not correlated with The CEO of Skyco, a publicly-traded company that has been earning below-average returns, has been publicly criticized by shareholders for persuading the board of directors to give her inter-est-free loans, for having the company purchase and furnish a lavish apartment in Paris for her personal use on her twice-yearly trips there, and for excessive stock options. "The board of directors of Acme Brands is discussing the design of a very generous stock option plan for its top executives. Abercrombie should find significant need for his services in companies in transitional economies. "The CEO of Skyco, a publicly-traded company that has been earning below-average returns, has been publicly criticized by shareholders for persuading the board of directors to give her interest-free loans, for having the company purchase and furnish a lavish apartment in Paris for her personal use on her twice-yearly trips there, and for excessive stock options. In McKinsey's previous studyconducted with 2014 numbersthat increase had been 35%. In a recent study, we examine board composition and financial data on 1,644 public companies in the U.S. between 1998 and 2011, controlling for numerous firm-specific characteristics like size and corporate governance structure. Our evidence is consistent with Sah and Stiglitz. b. a poison pill. "The top management team at Sierra Infusion is concerned about the declining performance of firms in their industry. c. the firm's tax issues. d.re-invested in additional corporate assets. "Shareholder value is: High-performing boards: What's on their agenda? | McKinsey

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