Chapter 2

Question 1

a legal entity created by an individual or group of shareholders who have ownership of the corporation( through shares of stocks issued by the corporation) to engage in business activities.

Answer 1

Corporation

Question 2

legal right to produce or sell something that have invented for a specific period of time.

Answer 2

Patents

Question 3

once registered, that same symbol or series of words cannot be used by any other organization

Answer 3

Trademarks

Question 4

a company or organization that has legal rights and responsibilities. i.e. the right to make contracts and the responsibility to pay debts.

Answer 4

Legal entity

Question 5

allows a single person to form a corporation without board of directors or shareholders

Answer 5

One Person Corporation ( OPC)

Question 6

help guide a company’s decisions and play a big part in deciding if the business will be successful. It provide a clear direction for the company and help in setting priorities and goals, as well as making informed decisions.

Answer 6

Business aims and objectives

Question 7

are the broad, general goals that summarize what a company wants to achieve

Answer 7

Business aims

Question 8

are specific, measurable targets that help a company achieve its aims.

Answer 8

Business objectives

Question 9

defines the organization’s business, its objectives and how it will reach these objectives

Answer 9

Mission statement

Question 10

outlines the company’s long-term goals and aspirations for the future in terms of its long-term growth and impact on the world

Answer 10

Vision Statement

Question 11

that can then be made to achieve targets.
This can motivate the employees.
It also enables the business to measure the progress toward its stated aims.

Answer 11

BUSINESS OBJECTIVES

Question 12

BUSINESS OBJECTIVES

Answer 12

Survival
Profit maximization
Profit satisficing
Sales growth

Question 13

a short-term object short-trembly for a small business just starting out, or when a new firm enters the market or at a time of crisis.

Answer 13

Survival

Question 14

try to make the most profit possible – most like to be the aim of the owners and shareholders.

Answer 14

Profit maximization

Question 15

try to make enough profit to keep the owners comfortable – probably the aim of smaller businesses whose owners do not want to work longer hours.

Answer 15

Profit satisficing

Question 16

where the business tries to make as many sales as possible this may be because the managers believe that the survival of the business depends on being large.

Answer 16

Sales growth

Question 17

organizations like the Co-op or the Body Shop have objectives that are based on their beliefs on how one should treat the environment and people who are less fortunate.

Answer 17

Ethical and socially responsible objectives

Question 18

run to not only generate a profit but provide a service to the public.

Answer 18

Public sector corporations

Question 19

monitor or control private sector activities have objectives that are to ensure that the business they are monitoring complies with the laws laid down.

Answer 19

Public sector organizations

Question 20

their objectives are to provide a service – most private schools for instance have charitable status. Their aim is the enhancement of their pupils through education.

Answer 20

Health care and education establishments

Question 21

their aims and objectives are led by the beliefs they stand for.

Answer 21

Charities and voluntary organizations

Question 22

Importance of business aims and objectives

Answer 22

• It provides clarity of direction, helping to prioritize efforts and allocate resources effectively.
• It helps measure company’s success, allowing to track progress and make better decisions
• It increases motivation of the employees, by helping them understand long-term goals
• It improves decision-making process at all levels of the organization.

Question 23

KEY PLAYERS IN CORPORATE GOVERNANCE

Answer 23

CEO
Chairman of the Board
Board of Directors
Shareholders
Stakeholders

Question 24

the person responsible for leading and managing the entire organization in achieving its organizational goals.

Answer 24

CEO

Question 25

not only provide leadership of the board but also play an important role in the governance practices of the company.

Answer 25

Chairman of the Board

Question 26

This is the best entity in steering the company’s strategic direction and evaluating its performance

Answer 26

Board of Directors

Question 27

Considered owners of the company through their ownership/ holdings of stock shares, this group actively seeks to maximize stock price increase over a period of time.

Answer 27

Shareholders

Question 28

Any group of people who are affected by how a corporation operates (i.e., employees, suppliers, government and society among others).

Answer 28

Stakeholders

Question 29

DIRECTORS CLASSIFICATION

Answer 29

Independent director
Non-executive director
Executive director

Question 30

Are individuals who have no connection with the company and are free from any relationship which may be considered a conflict of interest

Answer 30

Independent director

Question 31

Are individuals who are not part of the management but related to a certain aspect of the company, such as being a supplier, family representative, friend, adviser or shareholder

Answer 31

Non-executive director

Question 32

Hold a particular executive position inside the organization, such as CEO or other senior executive position such as the vice president.

Answer 32

Executive director

Question 33

usually makes decisions on corporate policy and operations.

Answer 33

PRESIDENT

Question 34

assumes the president’s function in his or her absence. Also often be responsible for running part of the corporation’s business or operations.

Answer 34

VICE PRESIDENT

Question 35

makes and keeps the corporate books and records. This includes keeping the records of directors’ and shareholders’ meetings and the corporation’s stock record book.

Answer 35

SECRETARY

Question 36

keeps the corporation’s money and is responsible for taxes,
Financial reports, etc.

Answer 36

TREASURER

Question 37

formed because board work can be done effectively. By focusing and discussing particular issues separately from general board meetings, the time management of directors is optimized.

Answer 37

COMMITTEE

Question 38

DIFFERENT COMMITEES

Answer 38

AUDIT COMMITTEE
REMUNERATION COMMITTEE
NOMINATION COMMITTEE

Question 39

as a result of corporate meltdowns, this committee has become a nonnegotiable aspect of good governance. The main objective of this committee is to oversee accounting and financial reporting processes and results. They make sure that internal and external audits are carried out with integrity.

Answer 39

AUDIT COMMITTEE

Question 40

this committee is responsible for identifying compensation and benefit plans for directors and senior executives through performance appraisals.

Answer 40

REMUNERATION COMMITTEE-

Question 41

to assure an effective working board, the directors on board must be independent thinkers, including executive directors.This committee should nominate the right mix of board members to ensure objectivity, independence, and expertise.

Answer 41

NOMINATION COMMITTEE

Question 42

checklist allows you to check your corporation’s compliance with your rule book and the law.

Answer 42

HEALTHY CORPORATION CHECKLIST