Part 4 c. What does the columnist mean by "governance failures"? Who is failing? Why might these failures be happening? A. Governance failure is when a firm's top management fails to act in the best interests of its customers and instead acts in ways to increase their own salaries and bonuses. B. Governance failure is when a firm's top management fails to act in the best interests of its shareholders and instead acts in ways to increase their own salaries and bonuses. C. Governance failure is when a firm's top management fails to act in the best interests of its shareholders and instead acts in ways to increase the profits of the firm. D. Governance failure is when a firm's top management fails to act in the best interests of its board of directors and instead acts in ways to increase the profits of the firm.
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According to an opinion column in the Wall Street Journal, "Directors need to be held more accountable when they fail to set the proper tone at the top, and right now there is almost no consequence for most governance failures."Source: Ronald Barusch, "CBS and the Need to Hold Directors Accountable," Wall Street Journal, September 16, 2018. Part 2 a. What is the key principalagent problem that exists in some corporations? A. The firm's top managementthe agentsmay pursue their own interests rather than the interests of the firm's customersthe principal. B. The firm's top managementthe principalmay pursue their own interests rather than the interests of its workersthe agents. C. The firm's top managementthe agentsmay pursue their own interests rather than the interests of its shareholdersthe principal. D. The firm's shareholdersthe principalmay pursue their own interests rather than the interests of the firm's top managementthe agents. Part 3 b. To whom are members of the board of directors responsible? A. The inside directors of the corporation. B. The customers of the corporation. C. The employees of the corporation. D. The shareholders of the corporation. Part 4 c. What does the columnist mean by "governance failures"? Who is failing? Why might these failures be happening? A. Governance failure is when a firm's top management fails to act in the best interests of its customers and instead acts in ways to increase their own salaries and bonuses. B. Governance failure is when a firm's top management fails to act in the best interests of its shareholders and instead acts in ways to increase their own salaries and bonuses. C. Governance failure is when a firm's top management fails to act in the best interests of its shareholders and instead acts in ways to increase the profits of the firm. D. Governance failure is when a firm's top management fails to act in the best interests of its board of directors and instead acts in ways to increase the profits of the firm.
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