Which of the Following Statements Is FALSE

question 29

Multiple Choice

Which of the following statements is FALSE?

• A)The shareholders as a group elect a board of directors to monitor managers.The directors themselves,however,have the same conflict of interest-monitoring is costly and in many cases directors do not get significantly greater benefits than other shareholders from monitoring the managers closely.
• B)In principle,the board of directors hires the executive team,sets its compensation,approves major investments and acquisitions,and dismisses executives if necessary.
• C)In the United States,the board of directors has a clear fiduciary duty to protect the interests of both the owners of the firm (the shareholders)and the interests of other stakeholders in the firm (such as the employees).
• D)When the ownership of a corporation is widely held,no one shareholder has an incentive to bear the cost of monitoring,because she bears the full cost of monitoring but the benefit is divided among all shareholders.

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Definitions:

Civil Rights Act of 1964

A landmark piece of legislation in the United States that outlawed discrimination based on race, color, religion, sex, or national origin.

Fair Labor Standards Act

A U.S. law that establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.

Bona Fide Occupational Qualification

A bona fide occupational qualification is a work requirement that is reasonably necessary to the normal operation of a particular business or job and is used as a defense against discrimination claims.

Discrimination

The unfair or biased treatment of various groups of people or objects, particularly based on race, age, or gender.