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:

Bronfenbrenner

A psychologist known for his ecological systems theory, which considers the complex interrelations between individual development and environmental factors.

Microsystem

A part of the ecological systems theory that refers to the immediate environment in which an individual interacts, such as family, school, peers, and workplace.

Bronfenbrenner

Urie Bronfenbrenner, a developmental psychologist renowned for the Ecological Systems Theory, which explains how the inherent qualities of a child and the characteristics of the external environment interact to influence how the child grows and develops.

Ecological-Systems Model

A framework identifying the various environmental layers that influence an individual's development, from immediate surroundings to broader societal contexts.