Which Statements About Boards of Directors Are Correct

question 37

Multiple Choice

Which statements about boards of directors are correct?

• A)Outside directors are employees or people who have other ties to the company.
• B)Outside directors provide a method of balancing power and a system of checks and balances to help prevent corruption.
• C)The potential problem of inside directors is that they are often beholden to the CEO and may agree with whatever the executive wants.
• D)Board members are balanced in gender and ethnicity.
• E)Outside directors are rarely friends of a company's CEO, and thus provide fair and impartial opinions about the business's operations.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.