Several Members of the Board of Directors of American Textile

question 120

Multiple Choice

Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director.Which of the following circumstances would MOST likely have initiated this proposal?

• A) ATP has been the initiator of several hostile takeovers in the last two years.
• B) The board has been successful in reducing the percentage of CEO pay that is composed of stock options.
• C) The CEO/chairperson of the board has been suspected of opportunistic behavior.
• D) The firm is traded on the New York Stock Exchange and must change its corporate governance to comply with the NYSE's new rules.

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Definitions:

Property Rights

Legal rights to use, control, and derive benefits from a resource, asset, or property, including the right to exclude others from using it.

Demographic Transition

A model that describes the transformation of a society from high birth and death rates to low birth and death rates as a country develops from a pre-industrial to an industrialized economic system.

Renewable Resources

Natural resources that can be replenished naturally over short periods of time, such as solar energy, wind, and water.

Nonrenewable Resources

Nonrenewable resources are natural resources that cannot be replenished or replaced at the same rate at which they are consumed, such as oil, coal, and natural gas.