12 Questions
What is the primary concern in the agency issue?
Divergence of interests between principals and agents
What is the goal of corporate governance mechanisms?
To enable managers to use their expertise while keeping them from acting in their own self-interest
What is the primary difference between corporate governance and corporate social responsibility?
Prioritizing shareholders' interests vs. stakeholders' interests
What is an example of an internal governance mechanism?
Board supervision by outside directors
What is an example of a means of governance that can discipline managers?
Takeovers
What is the concept that emphasizes social, environmental, and economic responsibilities?
Triple Bottom Line
What is the main argument against CSR according to Milton Friedman?
It's a negligence to shareholders
What is the term for companies that pretend to comply with CSR but do not actually make significant changes?
Symbolic CSR
What is the name of the companies that pursue both social and environmental benefits, in addition to economic benefits?
Benefit Corporations
What is the term for when companies claim their products are 'green' when they are not?
Greenwashing
What is the problem that arises when companies that are more likely to engage in irresponsible behavior are more likely to engage in CSR?
Adverse Selection Problem
What is the term for the area of CSR that is not confined to a firm's direct operating area, but also includes suppliers and partners?
Boundary of Firm Responsibility
Test your understanding of corporate governance, agency issues, and the effects of agency problems on corporate strategy and decision-making. Learn about the need for professional managers and the impact of short-term focus on business operations.
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