GE's Board Has Only One Inside Director,Jeffrey Immelt,GE's CEO,who Also

question 42

Multiple Choice

GE's board has only one inside director,Jeffrey Immelt,GE's CEO,who also acts as chairman of the board.This is known as duality.Which of the following statements represents the best argument for this duality in GE?

• A) The CEO is likely to be more responsible because he is setting his own performance targets.
• B) The CEO might be able to influence the board through setting the meeting agendas.
• C) The CEO possesses invaluable inside information that can help chair the board effectively.
• D) The CEO will suggest board appointees who are friendly toward him or her.

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Definitions:

Present Value Method

A financial calculation that determines the current worth of a future stream of cash flows, discounted at a specific rate.

Estimated Average

A calculation that aims to determine the central or typical value of a data set or projection.

Average Rate

A calculation representing the central or typical value in a set of rates, or a fixed rate determined as an average from several rates.

Capital Investment

Funds spent by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.