In a Self-Perpetuating Board, New Members Are Selected By

question 19

Multiple Choice

In a self-perpetuating board, new members are selected by:

• A) the membership of the organization.
• B) the CEO.
• C) the existing members of the board.
• D) a selection committee.

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Definitions:

Cost-Benefit Principle

An economic principle that compares the cost of an action to its benefits. The action is considered favorable if the benefits outweigh the costs.

Collusion

An agreement, usually secretive, between two or more parties to limit open competition by deceiving or defrauding others of their legal rights, or to obtain an objective forbidden by law, typically involving fraud or gaining an unfair market advantage.

Establishing Responsibilities

A principle of internal control that aims to clearly define roles and duties within an organization to ensure accountability and efficient operations.

Internal Control System

A process employed by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.