All of the Following Are Principles of Good Organizational Governance

question 67

Multiple Choice

All of the following are principles of good organizational governance, as established by Business Week, EXCEPT

• A) Each director attends at least 75 percent of all meetings.
• B) The audit, compensation and nominating committees are made up solely of outside directors.
• C) Each director owns a large equity stake in the company, excluding stock options.
• D) At least three directors are current or former company executives.
• E) The CEO is not also the Chairperson of the Board.

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Definitions:

Two-Variance Analysis

An analytical technique in managerial accounting where variances between expected and actual performance are divided into a volume variance and a rate or efficiency variance.

Overhead Controllable

Expenses incurred in the running of a business that management can directly influence or control, such as supplies and advertising.

Overhead Volume

Overhead Volume refers to the level of overhead costs that correlate with the level of production or activity in a company.

Variance Reports

Reports that analyze the difference between planned figures and actual figures for a particular metric, helping management understand performance discrepancies.