Hubbard,Rice and Galvin Argue That Various Issues Agreed by Boards

question 36

Multiple Choice

Hubbard,Rice and Galvin argue that various issues agreed by boards regarding performance do not include:

• A)boards should act only for the shareholders
• B)performance,not conformance,is the key
• C)boards should measure organisational performance over the long term,not the short term
• D)board performance should be assessed

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Definitions:

Top Managers

Senior executives responsible for making strategic decisions and overseeing the overall operations of an organization.

Asymmetric Information

A situation in which one party in a transaction has more or significantly better information than the other, leading to an imbalance in the transaction.

Moral-Hazard

A situation where one party is more likely to take risks because the consequences of those risks will be felt by another party.

Principal-Agent Problem

A dilemma arising from a conflict of interest between a principal (someone who entrusts a task) and an agent (the one performing the task), where the agent may not act in the best interest of the principal.