Which of the Following Principles Should a Company Follow for Effective

question 43

Multiple Choice

Which of the following principles should a company follow for effective corporate governance?

• A) Appointments to the board of directors should always be made on basis of quid pro quo agreements.
• B) The board of directors and the CEO should work together when evaluating risk-versus-reward scenarios.
• C) The board of directors should consist solely of members who have direct connections to the company.
• D) The roles of the chairperson of the board and that of the chief executive officer should be merged.

---

Definitions:

Rival in Consumption

A characteristic of a good whereby consumption by one individual prevents simultaneous consumption by another individual.

Rival in Consumption

A characteristic of goods whereby the consumption by one individual reduces the availability of the good for consumption by another individual.

Potato Chips

Thin slices of potato that are fried or baked until crisp and served as a snack.

Tornado Siren

An audible siren or alarm system used to warn people in a specific area about the imminent threat of a tornado.