1. reimbursement is PROHIBITED if she was held liable to the corporation
2. corp MUST reimburse director or officer if she won a judgment on the merits or otherwise
-EXCEPT expense from suit to recover reimbursement where she had a right but corp refused
3. corp MAY reimburse director or officer in any other case (i.e. settlement) where she acted:
(a) in good faith AND
(b) for a purpose reasonably believed in the company's best interest
(c) determined
by:
- (i). The Board (with a quorum of directors being non-parties); or, if there is no such quorum,
- (ii). Shareholders or a quorum of those directors who are disinterested; or
- (iii) The Board pursuant to report from independent legal counsel.
4. Notwithstanding the categories above, the court (in which the officer or director was sued) MAY order the corporation to reimburse her for litigation expenses and attorney's fees IF:
(a)????
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Terms in this set (35)
From the perspective of the public, the primary job of the board of directors is
To closely monitor the actions of management
The relationship among the board of directors, top management, and shareholders is referred
to as
corporate governance
The requirements of a board of directors vary significantly by country and by state; however,
there is a developing consensus as to what the major responsibilities should be. Which of the
following is not one of the responsibilities?
becoming directly involved in managerial decisions
4) Which of the following statements is not true regarding the board of directors?
more than half of all publicly traded companies in the united state are incorporated in New York, Requiring that the corporation be managed in accordance with NY state laws.
More than ________ of outside directors surveyed said that they had been named as part of a lawsuit against the corporation.
40%
A
careless director or directors can be held personally liable for harm done to the corporation
if they failed to act with
due care
Which of the following is not a task of the board of directors in strategic management?
to implement
catalyst- level boards of directors typically
take leading roles in establishing and modifying the company mission, objectives, and strategy
a highly involved board does all of the following EXCEPT
Manage the everyday operations of the organization.
10) The ________ boards typically never initiate or determine strategy unless a crisis occurs.
Rubber Stamp
11) According to the text, most publicly owned large corporations today tend to have boards with
what degree of involvement in the strategic management process?
nominal to active
What percentage of public corporations have periodic board meetings devoted primarily to
the review of overall strategy?
74%
13)
When a board of directors is involved to a limited degree in the performance or review of
selected key decisions, indicators, or programs of management, the degree of involvement is
referred to as
Nominal participation
The board of directors has an obligation to approve all decisions that might affect the long-run performance of the corporation.
TRUE
15) The term "corporate governance" refers to the relationship among the board of directors, top
management, and the shareholders in determining the direction and performance of the corporation.
true
16) The more active professional boards are being replaced by the board as a rubber stamp of the
CEO.
FALSE
17) Succession planning for the board and top management team is one of the five
responsibilities of the board of directors.
true
Those directors who fail to act with due care and allow the corporation to be harmed may be held personally liable
true
A 2011 McKinsey and Company survey found that less than
ten percent of a board's time is
spent on current strategy.
False
The lowest degree of involvement for a board of directors is the catalyst level of interaction.
FALSE
Generally, the smaller the corporation, the less active is its board of directors.
TRUE
Outside directors are defined as
individuals on the board who are not employed by the board's corporation.
According to ________ theory, ________ directors tend to identify with the corporation and
its success.
Stewardship; inside
Surveys of large U.S. and Canadian corporations found outsiders make up what
percentage
of total board membership?
80%
The percentage of directors of small, publicly held U.S. corporations who are outsiders is approximately
20-40%
The theory which states that problems arise in corporations because top management no
longer is willing to bear the brunt of their decisions unless they own a substantial
amount of stock in the corporation is called
agency theory
29) Research reveals that the likelihood of a firm engaging in illegal behavior or being sued
declines
with the addition of outsiders on the board.
The average board member of a U.S. Fortune 500 firm serves on ________ board(s).
3
Board members who are not employed by the corporation, but handle the legal or insurance needs of the firm and are thus not true "outsiders," are what kind of directors?
affliliated directors
Sixty-six percent of the outstanding stock in the largest U.S. and UK corporations is now owned by
institutional investors
33) ________ theory argues that senior executives over time tend to view the corporation as an extension of themselves.
stewardship
An agency problem can occur when
The desires and objectives of the owners and agents conflict
Which of the following regions is the most globalized region of the world in terms
of boards
of directors with most companies having one or more non-national directors?
europe
Korn/Ferry International reported that amongst the 100 largest companies listed in 2011
________ of boards of directors had at least one female director.
96%
A study by Korn/Ferry found that ________ of U.S. boards of directors had
at least one
ethnic minority member in 2007.
78%
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