Bruyneels
Coles
Fich
Hermalin
Klein
100
Between what types of social ties between CEOs and the audit committee do the authors distinguish?
a. employment, non-professional, family
b. employment, past education, friendship
c. family, friendship, employment
d. non-professional, friendship
b. employment, past education, friendship
100
The article differentiates between simple and complex firms. According to Coles (2008) firms can be complex along different dimensions, such as
a. scope of operations, firm size, leverage
b. organizational structure, financial reporting method, firm size
c. scope of operations, organizational structure, Tobin´s Q
a. scope of operations, firm size, leverage
100
The article focuses on busy board members. How many boards must directors serve in order to be called busy?
a. 2
b. 3 or more
c. 5 or more
b. 3 or more
100
According to Hermalin and Weisbach (2003) the board composition is ________ related to corporate performance and the board size is _______ related to corporate performance.
a. positively; negatively
b. positively; not
c. not; negatively
d. negatively; positively
c. not; negatively
100
In December 1999, the NYSE and NASDAQ modified their requirements for audit committees. Under the new standards, firms must maintain audit committees with at least _____ directors
a. one
b. two
c. three
d. four
c. three
300
Approximately, how much percent of audit committees are not fully independent as suggested by social ties to the CEO?
a. 20%
b. 40%
c. 60%
d. Since the Sarbane-Oxley Reform in 2002 social ties between CEOs and audit committees are forbidden and therefore non-existent.
b. 40%
300
Where does the typical board size for a complex firm lie?
a. A
b. B
c. C
b. B
300
Boards in which the majority of ___ directors are busy, are ___ likely to remove a CEO
a. outside, more
b. inside, more
c. outside, less
d. inside, less
c. outside, less
300
What influence do stakeholders have on the governance of firms?
a. The presence of venture capitalists can increase the CEO bargaining power relative to the board
b. Banks can appoint directors in case of poor performance
c. Both statements are correct
b. Banks can appoint directors in case of poor performance
300
What are the findings about earnings management?
a. Independent boards have a negative impact
b. Independent audit committees have a negative impact
c. both answers are correct.
c. both answers are correct.
500
Which of the following hypotheses established by Bruynseels (2014) proved to be true/ significant?
H1: As the proportion of social ties between the CEO and audit committee members increases, the quality of the audit committee’s oversight will decrease.
H2: The quality of the audit committee’s oversight will decrease more for social ties based on friendship networks than for social ties based on advice networks.
a. H1 is true; H2 is false
b. H1 is false; H2 is true
c. Both, H1 and H2, are true
d. Both, H1 and H2, are false
c. Both, H1 and H2, are true
500
How does Tobin's Q behave with more insiders on the board of an R&D intensive firm?
a. Q decreases with a higher fraction
b. Q increases with a higher fraction
c. Q is not sensitive to the number of insiders on the board.
d. The statement cannot be answered based on the article.
b. Q increases with a higher fraction
500
Do busy outside directors have an impact on the company's market to book ratio?
a. Yes, all things kept the same, their market to book ratio is around 4.2% lower.
b. Yes, all things kept the same, their market to book ratio is around 12.3% lower.
c. Yes, all things kept the same, their market to book ratio is around 4.2% higher.
d. Yes, all things kept the same, their market to book ratio is around 12.3% higher.
a. Yes, all things kept the same, their market to book ratio is around 4.2% lower.
500
Which statement is correct?
a. Board composition and size don't have a relation with the quality of the board's decision.
b. Boards that majorly consist of indirect directors usually have a lower CEO turnover than the other way around.
c. There is a positive relationship between CEO turnover and poor performance.
c. There is a positive relationship between CEO turnover and poor performance.
500
What happens when a company changes from a majority-independent to a minority-independent board?
a. Abnormal accruals go up
b. Abnormal accruals go down
c. Nothing changes
a. Abnormal accruals go up