Podcast
Questions and Answers
What is the main purpose of corporate governance?
What is the main purpose of corporate governance?
- To ensure that the company is managed accountably and transparently (correct)
- To dictate how companies invest their profits
- To regulate the salaries of top executives
- To provide guidelines for company advertising
According to Schleifer & Vishny (1997), what aspect of corporate governance is emphasized?
According to Schleifer & Vishny (1997), what aspect of corporate governance is emphasized?
- How suppliers of finance assure themselves of returns on their investments (correct)
- The importance of external control mechanisms
- The role of the government in corporate governance
- The necessity of shareholder approval for all decisions
Which of the following is NOT an important feature of corporate governance?
Which of the following is NOT an important feature of corporate governance?
- Building relationships between stakeholders
- Encouraging excessive risk-taking by companies (correct)
- Preventing individuals from having too much power
- Ensuring that companies are managed in the best interest of shareholders
What relationship does Agency Theory primarily address in corporate governance?
What relationship does Agency Theory primarily address in corporate governance?
According to Stewardship Theory, what motivates people to work for others or organizations?
According to Stewardship Theory, what motivates people to work for others or organizations?
Which theory focuses on optimizing relations with stakeholders to improve efficiencies in a project or organization?
Which theory focuses on optimizing relations with stakeholders to improve efficiencies in a project or organization?
How does Resource Dependency Theory view interorganizational relations?
How does Resource Dependency Theory view interorganizational relations?
Which theory refers to political influence in the governance structure of companies?
Which theory refers to political influence in the governance structure of companies?
Study Notes
Corporate Governance
- The main purpose of corporate governance is to ensure that the interests of stakeholders are protected and that the organization is managed in a responsible and effective manner.
Emphasis on Corporate Governance
- According to Schleifer & Vishny (1997), the aspect of corporate governance that is emphasized is the relationship between managers and shareholders.
Important Features of Corporate Governance
- The following are important features of corporate governance, except for the distribution of ownership among employees.
Agency Theory
- Agency Theory primarily addresses the relationship between principals (shareholders) and agents (managers) in corporate governance, focusing on the potential conflicts of interest that may arise.
Stewardship Theory
- According to Stewardship Theory, people are motivated to work for others or organizations because they are driven by a sense of responsibility and a desire to contribute to the success of the organization.
Stakeholder Theory
- Stakeholder Theory focuses on optimizing relations with stakeholders, including customers, suppliers, and employees, to improve efficiencies in a project or organization.
Resource Dependency Theory
- Resource Dependency Theory views interorganizational relations as a means of acquiring and managing resources, such as financing, technology, and expertise.
Political Theory
- The theory that refers to political influence in the governance structure of companies is Political Theory.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Explore the key concepts of corporate governance, including the system of rules, practices, and processes that direct and manage a company. Learn about how corporate governance ensures accountability, transparency, and a return on investment for finance providers. This quiz provides insights based on Schleifer & Vishny's work and the OECD guidelines.
