Corporate Governance
Chapter Exam Questions
Course Introduction
Corporate Governance explores the frameworks, policies, and processes that guide and control corporations, emphasizing the roles, responsibilities, and relationships among management, boards of directors, shareholders, and other stakeholders. The course examines best practices for fostering corporate accountability, transparency, ethical decision-making, and sustainable business performance. Students will analyze regulatory environments, governance structures, executive compensation, shareholder rights, risk management, and the impact of corporate governance on firm value and reputation. Through real-world case studies and current issues, learners will develop skills for evaluating governance effectiveness and guiding organizations toward responsible leadership and long-term success.
Recommended Textbook
Business Ethics Ethical Decision Making and Cases 9th Edition by O. C. Ferrell
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10 Chapters
440 Verified Questions
440 Flashcards
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Chapter 1: The Importance of Business Ethics
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41 Flashcards
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Sample Questions
Q1) Investors are concerned about business ethics because they know that misconduct can
A) foster stability.
B) improve employee commitment.
C) improve customer loyalty.
D) lower stock value and prices.
E) complicate business financial reporting.
Answer: D
Q2) The Dodd-Frank Wall Street Reform and Consumer Protection Act
A) was very popular among Wall Street bankers.
B) represented only modest reform.
C) came out of theological discussions in the 1920s.
D) was designed to make the financial services industry more responsible.
E) made it mandatory for public corporations to hire ethics officers.
Answer: D
Q3) Discuss the current state of business ethics in the twenty-first century.
Answer: Pages 14-16
Q4) How do values and judgments play a critical role when we make ethical decisions?
Answer: Page 7
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Chapter 2: Stakeholder Relationships, Social Responsibility, and Corporate Governance
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49 Flashcards
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Sample Questions
Q1) Which of the following is not a benefit that primary stakeholders tend to provide to organizations?
A) Supplies of capital and resources.
B) Expertise and leadership
C) Word-of-mouth promotion
D) Infrastructure
E) Pro-bono bookkeeping
Answer: E
Q2) A stakeholder orientation is not complete unless it includes A) clear accounting procedures.
B) major financing activities.
C) marketing strategy.
D) feedback from special-interest groups.
E) activities that actually address stakeholder issues.
Answer: E
Q3) Why do some businesspeople and scholars question whether ethics should have a role in business?
Answer: Page 37
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Chapter 3: Emerging Business Ethics Issues
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Sample Questions
Q1) A person uncomfortable with his employer's unspoken policy of hiring only white men is experiencing
A) a conflict of interest.
B) an ethical issue.
C) a feeling of guilt.
D) cognitive dissonance.
E) a moral attribute.
Answer: B
Q2) _____ involves tricking individuals into revealing their passwords or other valuable corporate information.
A) Shoulder surfing
B) Remote hacking
C) Social engineering
D) Physical hacking
E) Dumpster diving
Answer: C
Q3) What is a conflict of interest? Provide an example.
Answer: Page 70
Q4) What are the different definitions of bribery?
Answer: Page 70-71
Page 5
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Chapter 4: The Institutionalization of Business Ethics
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Sample Questions
Q1) The _____ was established after the latest financial crisis, in response to a situation that caused many consumers to lose their homes.
A) Environmental Protection Agency
B) World Bank
C) Consumer Financial Protection Agency
D) World Trade Organization
E) Sarbanes-Oxley Act
Q2) _____ tie(s) an organization's product(s) directly to a social concern through a marketing program.
A) Voluntary contributions
B) Cause-related marketing
C) Strategic philanthropy
D) Corporate giving
E) Employee benefits
Q3) What ethical issues affecting consumers and society as a whole are created by unfair competition?
Q4) Why do you think the costs of compliance with Sarbanes Oxley go down over time?
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6
Chapter 5: Ethical Decision Making and Ethical Leadership
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Sample Questions
Q1) If management fails to identify and educate employees about ethical problem areas, ethical issues may not reach the critical
A) awareness level.
B) aptitude level.
C) ethical level.
D) organizational level.
E) individual level.
Q2) Which of the following is not an issue that helps in business ethics evaluations and decisions?
A) Ethical issue intensity
B) Individual factors
C) Organizational factors
D) Personal guilt
E) Opportunity
Q3) Based on your own decision-making experiences and the material you have read in previous chapters, attempt to develop your own model, or framework, to describe the ethical decision-making process. Or, if you prefer, analyze and evaluate the synthesis model of ethical decision making.
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Chapter 6: Individual Factors: Moral Philosophies and Values
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Sample Questions
Q1) When a person defines right and wrong on the basis of legal contracts, he or she is using which of Kohlberg's stages of development?
A) Punishment and obedience (1st stage)
B) Mutual interpersonal expectations, relationships, and conformity (3rd stage)
C) Social system and conscience maintenance (4th stage)
D) Prior rights, social contract, or utility (5th stage)
E) Universal ethical principles (6th stage)
Q2) Kohlberg's six stages of cognitive moral development can be reduced to three levels of ethical concern. Persons at the second level
A) define right as that which conforms to the expectations of good behavior of the larger society.
B) see beyond the norms, laws, and authority of groups or individuals.
C) are concerned with their immediate interests and with external rewards and punishments.
D) are concerned with their long-term interests and with internal rewards and punishments.
E) are unethical.
Q3) What is white collar crime and why has it become such a widespread problem?
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Chapter 7: Organizational Factors: the Role of Ethical
Culture and Relationships
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Sample Questions
Q1) Melinda is a very popular executive. She inspires her employees to follow a common vision, facilitates change, and creates a strongly positive climate, all while stressing performance. Melinda has helped to create a(n) _____ culture.
A) authoritative
B) caring
C) integrative
D) exacting
E) affiliative
Q2) The establishment of an ethics committee within an organization
A) is usually highly informal.
B) is usually organized around general business topics.
C) might raise ethical concerns or resolve ethical dilemmas.
D) usually always succeeds.
E) usually increases ethical tension.
Q3) _____ are used to subdivide duties within functional areas of a company.
A) Work groups
B) Individuals
C) Experts
D) Consultants
E) Committees
Page 9
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Chapter 8: Developing an Effective Ethics Program
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Sample Questions
Q1) The ultimate "stick" associated with the FSGO is fines or probation, which involves on-site observation by consultants, monitoring of the company's ethical compliance efforts, and
A) reporting to the U.S. Sentencing Commission on the company's progress in avoiding misconduct.
B) installation of an ethics hotline.
C) payment of any penalties levied.
D) appointment of an appropriate high-level manager to oversee the company's program.
E) divestiture of all assets.
Q2) Most executives feel that which of the following is the primary reason for much of the unchecked misconduct in business?
A) Bad employees
B) An inattentive board of directors
C) Customer pressures
D) Financial performance pressures
E) Inadequate ethics and compliance programs
Q3) How can ethical dilemmas and behavioral simulations help employees make more ethical decisions?
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Page 10
Chapter 9: Managing and Controlling Ethics Programs
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Sample Questions
Q1) Which of the following is not a phase of escalation during an ethical disaster?
A) The firm's discovery of the misconduct
B) Ethical issue recognition
C) The firm's response to the misconduct
D) The decision to act unethically
E) The firm's decision to conduct an ethics audit
Q2) Any attempt to verify outcomes and to compare them with standards can be considered a(n) _____ activity, although many smaller firms do not use this word.
A) ethical
B) auditing
C) formal
D) informal
E) accounting
Q3) Describe the process of conducting an ethics audit in detail.
Q4) Which of the following is not a measure of ethical climate?
A) Collective skill
B) Collective ethical sensitivity
C) Collective character
D) Collective judgment
E) Collective moral motivation
Page 11
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Chapter 10: Globalization of Ethical Decision Making
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Sample Questions
Q1) What are the roles of the IMF and the WTO in encouraging, monitoring, and regulating international trade?
Q2) _____ assumes that economic decisions are influenced by human behavior.
A) Rational economics
B) Socialism
C) Capitalism
D) Rational capitalism
E) Behavioral economics
Q3) Which of the following is not a criticism of or charge against multinational corporations (MNCs)?
A) They transfer jobs overseas, where wage rates are lower
B) They increase the gap between rich and poor nations
C) They pay excessively high taxes everywhere
D) They exploit the labor markets of host countries
E) They have an unfair advantage when competing with local businesses
Q4) How can differences in two countries' cultures create ethical issues in business?
Q5) Discuss the ethical issues associated with multinational corporations.
Q6) What is dumping and why is it considered anticompetitive? Does the United States allow dumping?
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