Which of the Following Statements Is FALSE

question 29

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 the United States,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 she bears the full cost of monitoring but the benefit is divided among all shareholders.

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Definitions:

Last Words

The final statements or utterances made by an individual before death or a significant event, often remembered for their emotional or historical significance.

French Constitution

The fundamental law or set of legal principles that outlines the governance structure of France, including the powers of the government and rights of citizens.

Strong Executive Authority

Generally denotes a system of governance where the executive branch has significant power over policy decisions and implementation, often contrasted with a more decentralized or parliamentary system.

Institutionalize

The process of establishing something as a convention or norm in an organization or culture.