Critics Advocate Reforms to Ensure That Independent Outside Directors Represent

question 76

True/False

Critics advocate reforms to ensure that independent outside directors represent a significant majority of the total membership of the board.But outsider-dominated boards may emphasize the use of financial as opposed to strategic controls.The risk of reliance on financial controls is that they may encourage managers to make decisions to maximize their interests and reduce their employment risk.

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Definitions:

Stress

(1) Physical or psychological demands on a person or organism. (2) Response to physical or psychological demands.

Adapt Thinking

The process of adjusting one's thoughts and cognitive processes in response to new information or environments.

Growth

An increase in size, number, value, or strength.

Sigmund Freud

An Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.