Corporate Governance
Chapter Exam Questions
Course Introduction
Corporate Governance explores the frameworks, processes, and mechanisms that direct and control corporations, focusing on the relationships among a companys management, its board, shareholders, and other stakeholders. The course examines best practices for promoting transparency, accountability, and ethical decision-making within organizations. Topics include the roles and responsibilities of boards of directors, governance structures, regulatory environments, executive compensation, shareholder rights, and emerging issues such as ESG (Environmental, Social, and Governance) criteria. Through case studies and real-world examples, students gain insights into how effective governance enhances organizational performance and mitigates risk.
Recommended Textbook
Business Ethics Ethical Decision Making and Cases 11th Edition by O. C. Ferrell
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Chapter 1: The Importance of Business Ethics
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Q1) What business ethics issue was a major concern during the 192s?
A)Sustainability
B)Consumerism
C)Living wage
D)Bribery
E)Abusive managers
Answer: C
Q2) The six principles of the Defense Industry Initiative on Business Ethics and Conduct became the foundation for
A)the Foreign Corrupt Practices Act.
B)the Federal Sentencing Guidelines for Organizations.
C)the Ethical Trading Initiative.
D)the Federal Trade Commission compliance requirements.
E)the Sarbanes-Oxley Act.
Answer: B
Q3) Every organization has the potential for unethical behavior,even if it is not a business.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Stakeholder Relationships, Social Responsibility, and Corporate Governance
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Q1) Public health and safety and support of local organizations are issues most relevant to which stakeholder group?
A)Investors
B)Community
C)Suppliers
D)Customers
E)Employees
Answer: B
Q2) Which of the following is a major ethical concern among corporate boards of directors?
A)Compensation
B)The non-traditional directorship approach
C)Dividend reporting
D)Secondary stakeholders
E)Debt swaps
Answer: A
Q3) Social responsibility rests on a stakeholder orientation.?
A)True
B)False
Answer: True
4
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Chapter 3: Emerging Business Ethics Issues
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Q1) Which of the following statements is most correct?
A)Affirmative action programs require quotas to govern employment decisions.
B)Affirmative action programs have eliminated discrimination in employment.
C)Affirmative action programs are required in all organizations by law.
D)Affirmative action programs involve efforts to recruit, hire, train, and promote qualified individuals from groups that have traditionally been discriminated against on the basis of race, gender, or other characteristics.
E)Affirmative action programs have fallen out of favor because they have been proven to result in reverse discrimination against non-minorities who are the most qualified for the position.
Answer: D
Q2) Examples of consumer fraud include shoplifting,collusion,guile,and duplicity?.
A)True
B)False
Answer: True
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Chapter 4: The Institutionalization of Business Ethics
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Q1) The Sarbanes-Oxley Act created the _____ to oversee the accounting firms that audit public corporations and to establish rules and standards for auditing.
A)Public Company Accounting Oversight Board
B)Corporate Accounting Oversight Commission
C)Consumer Financial Protection Bureau
D)Occupational Health and Safety Administration
E)Equal Employment Opportunity Commission
Q2) Some,especially those in business,complain that the Sarbanes-Oxley Act and similar legislation
A)is excessively complex and financially burdensome.
B)is not necessary.
C)is fair to all firms.
D)has reduced restatements of financial reports.
E)is too simplistic.
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
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Q1) High levels of _____ create a higher probability that firms cut corners because margins are usually low.
A)Profit
B)Return
C)Cooperation
D)Competition
E)Loss
Q2) An ethical corporate culture needs _____ along with _____ to establish an ethics program and monitor the complex ethical decisions being made by employees .
A)individual ethics; ethical issue intensity
B)ethical issue intensity; ethics training
C)organizational factors; individual factors
D)employee evaluations; good intentions
E)shared values; proper oversight
Q3) The terms moral intensity and ethical issue intensity can be used interchangeably.?
A)True
B)False
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Page 7
Chapter 6: Individual Factors: Moral Philosophies and Values
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Q1) An individual who believes that an action is ethical because others within his or her company and industry regularly engage in the activity is probably a(n)
A)utilitarian.
B)relativist.
C)teleologist.
D)deontologist.
E)egoist.
Q2) The elements of _____ important to business transactions have been defined as trust,self-control,empathy,fairness,and truthfulness.
A)egoism
B)utilitarianism
C)deontology
D)moral philosophy
E)virtue
Q3) Interactional justice considers the processes and activities that produce a particular outcome.?
A)True
B)False
Q4) 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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Q1) The ____ rule explains variation in employee conduct through generalizing on the percentage of employees in any given organization who will seek to do right versus how many will be indifferent.
A)10-30-40-20
B)20-30-30-20
C)40-10-10-40
D)10-40-40-10
E)80-20
Q2) Describe the different kinds of power.Are some types of power more likely to result in ethical behavior than others?
Q3) The idea that people learn ethical or unethical behavior while interacting with others who are a part of their role-sets is referred to as
A)group norms.
B)cognitive memory dissonance.
C)cognitive association.
D)differential association.
E)casual interaction.
Q4) Describe the four organizational cultures and provide a company example of each organizational culture.
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Chapter 8: Developing an Effective Ethics Program
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Q1) How can ethical dilemmas and behavioral simulations help employees make more ethical decisions?
Q2) _____ may be more inclined to engage in unethical organizational conduct because of social isolation that creates insensitivity and a lower level of motivation to regulate ethical decision making.
A)Low-level employees
B)International managers
C)Top managers
D)Government officials
E)Fortune 500 companies
Q3) What are some of the ways that organizations can develop effective ethics programs?
Q4) What are the major features of a successful ethics training program and communication systems? Think of an example of a company with strong employee ethics training.
Q5) One common problem found with corporate codes of ethics is that the codes were written too legalistically.?
A)True
B)False
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Chapter 9: Managing and Controlling Ethics Programs
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Q1) During which of the following steps of the ethics auditing process does an organization identify the tools or methods for measuring progress in improving employees' ethical decisions and conduct?
A)Secure commitment of top managers and directors
B)Establish a committee to oversee the audit
C)Define the scope of the audit
D)Collect and analyze relevant information
E)Verify the results
Q2) Independent verification of the ethics audit is important because it lends the report
A)credibility and formality.
B)credibility and civility.
C)credibility and objectivity.
D)objectivity and civility.
E)objectivity and formality.
Q3) An ethics audit is much broader than a social audit.?
A)True
B)False
Q4) How can companies secure stakeholder input during an ethics audit? Why is it important to do so?
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Chapter 1: Globalization of Ethical Decision Making
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Q1) What is dumping and why is it considered anticompetitive? Does the United States allow dumping?
Q2) Why might vertical systems be a business ethics issue? ?
A)They can result in lower wages for factory workers.
B)They can increase consumerism and planned obsolescence.
C)They can result in a channel member having too much control.
D)They cut out the need for retailers and wholesalers.
E)They threaten the existence of large multinational corporations.
Q3) _____ assumes that economic decisions are influenced by human behavior.
A)Rational economics
B)Socialism
C)Capitalism
D)Rational capitalism
E)Behavioral economics
Q4) Facilitation payments are not allowed under the Foreign Corrupt Practices Act.?
A)True
B)False
Q5) Socialism is synonymous with communism.?
A)True
B)False
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Chapter 11: Ethical Leadership
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Q1) Which of the following is true about ethical leadership?
A)It is a foundational requirement for impacting the long-term valuation of the firm.
B)It is necessary for the firm to achieve profitability to satisfy shareholders.
C)It maintains a short-term orientation to ethical decision making.
D)It requires ethical leaders to have charismatic personalities.
E)It usually avoids transactional leadership.
Q2) Leaders having a(n)_____ conflict management style are highly assertive and not very cooperative.
A)Accommodating
B)Avoiding
C)Collaborating
D)Competing
E)Compromising
Q3) Paralanguage includes gestures,facial expressions,proximity,time and dress.
A)True
B)False
Q4) Describe and differentiate between a compliance-based approach and an integrity-based approach to leadership.Which approach is preferred?Justify your response.
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Chapter 12: Sustainability: Ethical and Social Responsibility
Dimensions
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Q1) The world's forests are being destroyed at a rate of 58,square miles annually.The reasons for this wide-scale destruction are varied and include all except:
A)The boom in biofuels
B)The soil is great for farming
C)Logging profits
D)Cycle of poverty
E)Converting land to other use
Q2) Discuss the benefits of green marketing and the long-term pitfalls of greenwashing.
Q3) Which of the following does a cap-and-trade program reduce?
A)Carbon emissions
B)Waste
C)Water pollution
D)Deforestation
E)Fracking
Q4) Green Globes and LEED are certification groups that authorize buildings as "green." ?
A)True
B)False
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