Which of the Following Statements Is False

question 31

Multiple Choice

Which of the following statements is false?

• A) The shareholders as a group elect a board of directors to monitor managers. The directors themselves, however, have the same conflict of interest - monitoring is costly and in many cases directors do not get significantly greater benefits than other shareholders from monitoring the managers closely.
• B) In principle, the board of directors hires the executive team, sets its compensation, approves major investments and acquisitions, and dismisses executives if necessary.
• C) In Canada, the board of directors has a clear fiduciary duty to protect the interests of both the owners of the firm (the shareholders) and the interests of other stakeholders in the firm (such as the employees).
• D) When the ownership of a corporation is widely held, no one shareholder has an incentive to bear the cost of monitoring, because he or she bears the full cost of monitoring but the benefit is divided among all shareholders.

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Definitions:

Perceptual Equivalence

The phenomenon where different stimuli are perceived as identical due to the perceptual system's interpretation, leading to a consistent perception of an object regardless of changes.

Spatial Equivalence

The concept that two or more entities occupy the same area or space in relation to each other.

Propositional Representation

The theory that all knowledge can be expressed in semantic-based propositions or statements, depicting relationships between concepts.

Verbal

Pertaining to words and language, especially the use and understanding of words in communication and reasoning.