Which of the Following Statements Is FALSE

question 8

Multiple Choice

Which of the following statements is FALSE?

• A)When the CEO is also chairman of the board,the nominating letter offering a seat to a new director comes from her.This process merely serves to reinforce the sense that the outside directors owe their positions to the CEO and work for the CEO rather than for the shareholders.
• B)Over time,most of the independent directors will have been nominated by the CEO.Even though they have no business ties to the firm,they are still likely to be friends or at least acquaintances of the CEO.
• C)Researchers have found the surprisingly robust result that larger boards are associated with greater firm value and performance.
• D)The CEO can be expected to stack the board with directors who are less likely to challenge her.

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Definitions:

Equity Theory

A theory that focuses on the fairness of outcomes that individuals receive in an organization, which influences their motivation and satisfaction.

Mere Exposure Effect

The tendency to prefer stimuli that we've been repeatedly exposed to, regardless of the stimuli's inherent qualities.

Brand Name

The name given to a particular product or service by its manufacturer or provider, used to distinguish it from competitors in the market.

Social Traps

Situations where a group or individual acts in a way that produces short-term rewards but leads to long-term negative consequences.