Boards of Directors Have Responded to Financial Crises, Corporate Scandals

question 114

Multiple Choice

Boards of directors have responded to financial crises, corporate scandals, regulator obligations, and investor requests for structural changes. In the 2011 Harvard Business Review study of the changes in configuration of boards since 1987, which change has been brought about by government legislation?

• A)Percentage of boards that have an average age of 64 or older has increased.
• B)Average pay for directors has increased.
• C)Percentage of boards with 12 or fewer members has increased.
• D)Percentage of the directors that are independent has increased.

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, including the balance sheet and income statement.

Future Value

The estimated value of an investment at a future point in time, based on its current value and expected growth rates over time, often used in financial planning and analysis.

Present Value

The current worth of a future sum of money or stream of cash flows given a specific rate of return.

Annuity Due

A type of annuity where payments are made at the beginning of each period, leading to an increase in the present value compared to payments made at the end of the period.