The Empirical Evidence on the Effectiveness of Non-Executive/ Outside Directors

question 1

Multiple Choice

The empirical evidence on the effectiveness of non-executive/ outside directors is conclusive and suggests that the latter increase firm value and performance.

• A)No, the existing evidence suggests that non-executives reduce firm performance and value.
• B)The existing evidence suggests that non-executives increase firm value, but only if they dominate the board of directors.
• C)No, the existing empirical evidence is as yet inconclusive.
• D)None of the above.

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Definitions:

Family Therapy

A form of psychotherapy that aims to resolve issues affecting the health and functioning of a family through therapeutic interventions involving multiple family members.

First-Generation Antipsychotic

A class of medications primarily used to treat psychosis, especially in schizophrenia and bipolar disorder, known for their dopamine antagonist properties.

Hallucinations

Perceptions in a conscious and awake state in the absence of external stimuli which have qualities of real perception.

Lobotomy

A surgical operation that involves severing connections in the brain's prefrontal lobe, historically used to treat mental illness.