b. may not have a direct effect on firm performance. In a study of 1,069 leading firms across 35 countries and 24 industries, we found that gender diversity relates to more productive companies, as measured by market value and revenue, only in . b. returned to them as dividends. The results of these two meta-analyses, summarizing numerous rigorous, original peer-reviewed studies, suggest that the relationship between board gender diversity and company performance is either non-exist (effectively zero) or very weakly positive. Research: When Gender Diversity Makes Firms More Productive d. reflected in the price of the stock. c. poorly-performing firms Not included in the physical count were$25,000 of goods purchased from Pelzer Corporation, f.o.b. For example, Norway, Spain, France, and Iceland all have laws requiring that women comprise at least 40% of boards at publicly listed companies. a. the director of food service for IFS. Agricultural Chemicals, Inc., was the target of a hostile takeover six months ago. The relationship was statistically significant suggesting it wasnt a chance effect but it was tiny. Board gender diversity thus explains about 1% of the variance in companies engagement in CSR. The CEO would pick up the phone frequently and connect us., Whoever is leading the board also has the responsibility of ensuring that quieter board members speak up in board meetings. d. ownership of a company to a second party. I think its also clear to say if youve got the longer-term members that came from the old established approach to the way boards were runthey may just not be quite as supportive in some cases., In boards like these, interviewees said discussing the issues rather that shrinking away from them was of utmost importance. German executives are not dedicated to the maximization of shareholder value largely because In the U.S., the fundamental goal of business is to, In the U.S., a firm's key stakeholder(s) is(are) the. a. installation of an outsider as the lead director on the Board of Directors. d.Traditionally privately-owned Japanese firms are going public. One board member shared: We look at diversity in a lot of different ways experience, age, ethnicity, gender, etc.. b. a standstill agreement. b. the addition of outside directors to the board. Research has found little to no evidence supporting the idea that companies with female board directors perform better than companies run by all-male boards. d.penalties for inadequate firm performance. 25 a. greenmail. Writing recently on Huffington Post, for example, one consultant observed the following: Companies with gender-diverse management teams have been proven to consistently perform better and be more profitable than those without them. c. CEOs and CFOs must personally certify the company's financial reports. c. Banks' influence over corporations is increas-ing. b. risks borne by CamCell is presently searching for a new CEO. d.banks. "The governance mechanism most closely connected with deterring unethical behaviors by holding top management accountable for the corporate culture is: And, finally, even if the addition of women to corporate boards does improve cognitive variety and decision making, companies may only see benefits to their accounting performance (their sales, profits, return on assets, for example) not their market returns. c. is so aggressive that boards of directors have become overly cautious. d.risk managers will not find a new top management position if they should be dismissed. HBR Learnings online leadership training helps you hone your skills with courses like Diversity, Inclusion, and Belonging. b. may not have a direct effect on firm performance. Increased regulation in the financial sector has increased the cost of mounting hos-tile takeovers. b. insuring that the strike price value of the options can be lowered if the organiza-tional environment becomes more risky. the board is homogenous in composition. But, thats impossible here; we cant randomly assign board members to companies. d. The gap in compensation between CEOs in public and private companies is in-creasing. d.potential tax burden for. Research suggests that boards of directors perform - Course Hero This seems unlikely. Nor are they any more profitable, for that matter. Monitoring by shareholders is usually accomplished through Managers in the U.S. receive ____ compensation than managers in the rest of the world. a. increases shareholder value significantly. a. high executive turnover. The governance mechanism most closely connected with deterring unethical behaviors by hold-ing top management accountable for the corporate culture is c. determined by the size of the firm. "Top executives resist tying their compensation to long-term performance of the firm mainly because: Which of the following statements is most likely to be TRUE? c. Competition An immense investigative effort has been devoted to these questions: over 140 studies in the past several decades, conducted in dozens of countries, and published in journals from many different disciplines and theoretical traditions. c. The CEO was never held responsible for his unethical actions. b. positively related to "There is some evidence that performance bonuses for executives based on annual results are ____ investments in R&D where the firm was highly diversified. c. managers' risk of job loss, loss of compensation, and/or loss of reputation. d.government agencies. d. Firms with higher state ownership tend to have lower market value and more vola-tility in those values over time. b. greater managerial autonomy. To make diverse boards more effective, boards need to have a more egalitarian culture one that elevates different voices, integrates contrasting insights, and welcomes conversations about diversity. c. excessive management compensation. Which of the following statements is true? c. agency b. increased diversification of the firm. c. remains constant. The interests of multinational corporations' shareholders may be best served when there is b. company unions, which are a type of governance system. b. more common than data values close to the mean. c. Institutional investors disapprove of long-term executive incentive plans and they may sell their blocks of stock in CamCell. d.made up of CPAs with auditing experience. Find the area bounded by the graphs of the indicated equations over the given intervals (when stated). Requiring that the directors own stock in the company. They also raised concerns with what they referred to as checking the box initiatives and tokenism for the sake of board diversity. b. long-term firm performance is more easily manipulated by the board of directors through financial and accounting methods than are shorter-term measures of firm performance. One means that is considered to improve the effectiveness of outside directors is a. the firm's free cash flow. Board Diversity, Firm Risk, and Corporate Policies d. has weakened the effect of other governance mechanisms. a. mandating that all outside directors be drawn from government or academia rather than industry. Implementing a director appraisal system. b. The benefits of having a socially and professionally diverse board cannot be realized without an egalitarian board culture. 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. a. "The interests of multinational corporations' shareholders may be best served when there is: As an illustration, I show that two current measures of board of director performance, board meeting activity and director attendance, suggest that the boards of Asian firms do not compare favorably to the boards of firms from developed markets. Innovation Oh, we have an opening, who do we know? He shared that many times board members only knew people like them. Activist shareholders are not necessarily more convinced about diversity being a source of value creation. The CEO's behavior may be indication of: Pletzer and his colleagues (2015) found that the average correlation between the percentage of women on the board and firm performance was small (.01) and not statistically significant. If the market for corporate control were efficient as a governance device, then only ____ would be targets for takeovers. In Japan, the principal source of the active monitoring of large companies comes from b. a poison pill. b. a weak board of directors. Consider two recent meta-analyses that have been conducted to summarize prior research on the topic. If investors are indeed interpreting female appointments as a sign that the company is less committed to maximizing returns to their shareholders, the effect of increases in board diversity should be larger for those companies that demonstrate commitment to social goals in other ways. d. Section 404 creates excessive costs for firms. a. generate free cash flows, reduce the risk of total firm failure b. "Monitoring by shareholders is usually accomplished through: b. executive compensation that is primarily based on long-term performance. An agency relationship exists when one party delegates c. crossing the palm with silver. His current boards are shifting to a different approach: a process of assessment where you periodically look at the skill sets that you would ideally want on the board, given the business its in, and then the skill sets you have, and you identify any missing. "A major conflict of interest between top executives and owners, is that top executives wish to diversify the firm in order to ____, while owners wish to diversify the firm to ____. Boards of directors are now becoming more involved in These dynamics appear to shape whether diversity on the board actually matters to the boards work. b. free cash flows a. increased diversification of Sierra Infusion. a. moving toward having directors from different backgrounds Research suggests that boards of directors perform better if a. the CEO is also the chairperson of the board of directors. c. an increased number of IPOs (initial public offerings) are expected. b. a standstill agreement. b. The board has been successful in reducing the percentage of CEO pay that is com-posed of stock options. a. As ownership of the corporation is diffused, shareholders' ability to monitor managerial deci-sions d.establishing and using formal processes to evaluate the board's performance. c. often performing above their industry averages. 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. The fact that a hostile takeover has occurred is proof that the firm was un-der-performing. 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. for example, one consultant observed the following: Pletzer, Nikolova, Kedzior, and Voelpel (2015), The Subtle Levers That Influence Affirmative Action, How Reshoring Will Restore the Drug Supply Chain, Climate Crisis: Who Is Responsible for the Planet? b. CamCell may have to over-compensate its CEO in order to offset the personal risk a CEO would undertake under this plan. c. public pension funds d.the board of directors. a. moving toward having directors from different backgrounds a. making CEOs more accountable for their performance. We found no difference in the perceived competence of Marilyn and Jack, which was not surprising given their identical bios. We then gave the participants a list of 10 corporate goals and asked them how much they thought the company cared about each of them. They prefer to start from a position of trust. b. requiring that outside directors be former executives of the firm. b. c. the board is homogenous in composition. b. increasing the concentration of ownership of large U.S. firms. Companies with a Digitally Savvy Board Perform Better Our interviewees suggested that social diversity (e.g., gender, race/ethnicity, and age diversity) and professional diversity are both important for increasing the diversity of perspectives represented on the board. "Compared to managers, shareholders prefer: a. c. public pension funds The board has been successful in reducing the percentage of CEO pay that is composed of stock options. The average correlation between board gender diversity and firm market performance (such as stock performance, shareholder returns) was even smaller and was not statistically significant. Does this mean that we should not promote women to corporate boards? c. The CEO/Chairperson of the board has been suspected of opportunistic behavior. b. institutional shareholders c. private shareholders rarely have large ownership positions in the firm. Institutional owners are c. increased shareholder participation in decision making. The CEO tended to dominate the conversation. "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. c. compensating directors with stock options rather than with fixed remuneration An executive's decisions often affect firm performance only over the long run. Earn badges to share on LinkedIn and your resume. a. management structures related to total quality management systems. This wouldnt be a problem if diversity initiatives were not seen by many investors as little more than costly experiments. b. the market for corporate control. Let d. consulting accounting advisors to make sure that the plan transfers wealth to the CEO without immediately appearing on the balance sheet of CyberScope. d. reduce their employment risk, increase the company's value, Agency costs reflect all of the following EXCEPT ____ costs. So, a tiny effect is statistically significant if the sample is big enough.). "The top management team at Sierra Infusion is concerned about the declining performance of firms in their industry. d.of the focus on stewardship-management in German firms rather than the financial perform-ance focus of U.S. firms. a. firms with unethical top executives "Executive compensation is a governance mechanism that seeks to align managers' and owners' interests through all of the following EXCEPT: A business journal from the Wharton School of the University of Pennsylvania. c. greenmail. All of the following statements are TRUE about the use of defense tactics by the target firm during a hostile takeover EXCEPT Women should be appointed to boards for reasons of gender equality., Women Directors and Other Dimensions of Company Performance. What would you recommend? "An agency relationship exists when one party delegates: Women should be appointed to boards for reasons of gender equality, but not because gender diversity on boards leads to improvements in company performance. a. safer strategies with greater diversification for the firm. c. is so aggressive that boards of directors have become overly cautious. Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(an) ____ director. Using meta-analytic techniques, we have uncovered findings that help to settle some of those answers. Hostile takeover attempts are so common that they do not reflect negatively on the firm's performance. c. A number of factors intervene between top-level management decisions and firm performance. Do companies with women on the board perform better than companies whose boards are all-male? a. bonuses. b. the market for corporate control. a. increases. b. institutional shareholders a. the roles of CEO and chairperson of the board of directors are usually combined. The team members are becoming concerned about the security of their jobs at Sierra Infusion. In other words, investors seem to be penalizing, rather than rewarding, companies that strive to be more inclusive. a. the firm is overpriced in the market. c. the board is homogenous incomposition. This plan will be very attractive in luring candidates for the CEO position. d.CEOs and other top executives tend to hold their jobs for five years or less, meaning they are not employed by the firm for the appropriate period of time. c. private shareholders rarely have large ownership positions in the firm. More Evidence That Company Diversity Leads To Better Profits - Forbes d. the head of contract services for the Marines. And even when individuals who are minorities, tokens, or outliers speak up, the majority group members may discount their views. a. some foreign firms have delisted on U.S. stock exchanges. Other research has found no relationship to performance at all. Meta-analyses linking team gender diversity to team performance (e.g., Bell et al., 2011) reach much the same conclusion as meta-analyses linking board gender diversity to firm performance that is, the relationship between team gender diversity and team performance is tiny. We dont know and cannot know. Which of the following statements is likely to be TRUE? c. large; small In research over the last five years, we found that only 24 percent of the boards of companies listed in the US and having over $1 billion in revenues were digitally savvy, and that these companies outperformed the others in our research on key metrics. b. higher performance of boards of directors and how various studies have tackled this challenge. Whats going on here? c. the government. c. Research shows that once a hostile takeover has been defeated, the firm is safe from other hostile takeover attempts for many years. b. a number of publicly-traded companies have decided to privatize. "One means that is considered to improve the effectiveness of outside directors is: They are more a function of general market conditions. The two meta-analyses reached very similar conclusions, despite the differences in the underlying studies (140 studies vs. 20, etc.). All of the following are correct about the chapter Strategic Focus on fraud and corporate gov-ernance failure at Satyam Computer Services Ltd. "In Japan, the principal source of the active monitoring of large companies comes from: d.the head of contract services for the Marines, Chapter 11: Organizational Structure and Cont, John David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine, Information Technology Project Management: Providing Measurable Organizational Value, Operations Management: Sustainability and Supply Chain Management, canvas quiz : Blood vessels and circulation. y=2x+8;y=12;1x2y=-2x+8;y=12;-1\leq{x}\leq2 b. insuring that the strike price value of the options can be lowered if the organizational environ-ment becomes more risky. a. reasonably compensating a CEO. a. risk that managers will behave opportunistically. b. a. decision making responsibility to a second party. b. internal controls have failed. Which of the following statements is FALSE? Mr. Abercrombie is considering expanding his consulting practice overseas. We find that companies are not any less profitable after appointing female directors to the board than they were prior to the appointment. Access more than 40 courses trusted by Fortune 500 companies. Many of our interviewees suggested that their boards had made progress on gender diversity but not on other forms of social diversity such as race, nationality, and age. Indeed, this is what Post and Byrons meta-analysis showed. "Boards of directors are now becoming more involved in: d. the top management team's interests and the owners' interests are aligned. We also asked them to evaluate the competence of the new board member. b. c. the laxity of institutional investors. b. financial responsibility to employees. b. riskier strategies with more focused diversifica-tion for the firm. If so, how and when? d.reduce the size of the stock option package provided to Mr. Leagreet. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. 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. Combined, the board members held seats on 47 corporate boards in the U.S. across a variety of industries. b. See answer Advertisement sandlee09 Answer: c. Explanation: Which of the following statements is most likely to be TRUE? d. the board of directors. One explained raising issues around diversity in the leadership pipeline and his desire to make this a higher board priority: One of our board members who is African-American came up to me afterwards and said, Thank you for bringing that up because I brought it up years ago, not so delicately, and nothing ever happened. So, hes like, Maybe if we get more of us looking at this, itll move the needle., Others similarly commented on the need to serve as a champion for diversity and inclusion on their boards if they wanted to keep the topic front and center. The compensation of top executives of Chinese companies is closely related to pri-or and current financial performance of the firm.
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