In Order to Minimize the Temptation for Managers to Act

question 46

Multiple Choice

In order to minimize the temptation for managers to act in their own self-interest, governance mechanisms exist for implementation consideration. Which of the following is not a primary means for monitoring managerial behavior?

• A)a board of directors that acts in the best interests of shareholders to create short-term value
• B)shareholder activism in which owners view themselves a shareowners
• C)a board of directors that acts in the best interests of shareholders to create long-term value
• D)managerial incentives to align management interests with those of the stockholders

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Definitions:

Contractual Obligation

A legal duty established by a contract between parties, enforceable by law.

Raw Materials Inventory

The stock of materials and components that a company holds for the future production of goods.

Present Analysis

The evaluation of current financial metrics and economic conditions to make decisions or forecasts about future performance.

Equipment Replacement

Equipment Replacement involves the process of substituting old, inefficient, or broken equipment with newer, more efficient models to maintain operational efficiency.