Which of the Following Statements Is FALSE

question 40

Multiple Choice

Which of the following statements is FALSE?

• A)A board is said to be classified when its monitoring duties have been compromised by connections or perceived loyalties to management.
• B)Even the most active independent directors spend only one or two days per month on firm business,and many independent directors sit on multiple boards,further dividing their attention.
• C)On a board composed of insider,gray,and independent directors,the role of the independent director is really that of a watchdog.
• D)Because independent directors' personal wealth is likely to be less sensitive to performance than that of insider and gray directors,they have less incentive to closely monitor the firm.

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Definitions:

Case Law

The collection of past legal decisions written by courts, which law later courts use as authoritative guidance in similar cases.

Legal Positivism

The school of jurisprudence which holds that because society requires authority, a legal and authoritarian hierarchy should exist. When a law is made, therefore, obedience is expected because authority created it.

Natural Law

A school of jurisprudence that recognizes the existence of higher law, or law that is morally superior to human laws.

Stare Decisis

Latin for “standing by the decision”; a principle stating that rulings made in higher courts are binding precedent for lower courts.