Chapter 3

Question 1

what are the ten practical tips

Answer 1

1. balance board composition
2. evaluate the board regularly
3. ensure director independence
4. ensure auditor independence
5. be transparent
6. define shareholders right
7. aim for long term value creation
8. manage risk proactively
9. follow sustainability best practices
10. document policies and procedures

Question 2

If all board members have the same level of experience and similar skill sets, you will not find the diversity of opinion required to rigorously challenge the company’s strategy and ensure it is watertight.

Answer 2

balance board composition

Question 3

Greater diversity boards introduces new ways of thinking and creative methods of solving problems, which prevent directors from resting on their laurels.

Answer 3

balance board composition

Question 4

is all about filling gaps in boardroom expertise to provide a broader range of viewpoints and a fresh perspective using strategic succession planning.

Answer 4

board diversity

Question 5

Helps you track progress over a period of time and understand where your own strengths lie as well as give you a good understanding of the areas that need improvement.

Answer 5

evaluate the board regularly

Question 6

________________ and __________ in the evaluation process breed confidence
and trust within the company and help you in your efforts to grow that diverse board of directors.

Answer 6

Open communication and transparency

Question 7

Evaluations should not be a tick-the-box exercise; they should feature candid, in-depth conversations that give you real data to work with to instill a culture of continuous improvement.

Answer 7

evaluate the board regularly

Question 8

__________ is desirable on a board that wants to break away from safe,
conservative thinking.

Answer 8

Independence

Question 9

need directors that are not afraid to think outside of the box, rather than simply continue down the same road the company has always taken. It helps create innovation and avoid stagnation.

Answer 9

Forward-looking boards

Question 10

are more likely to provide insights that benefit the shareholders, given their different perspective on matters.

Answer 10

independent directors

Question 11

Undue influence over the work of audit committees and independent auditors is a concern in terms of corporate governance.

Answer 11

ensure auditor independence

Question 12

Investors need to know that they can trust the financial reporting that an issuer makes, so independence is key to show that the reports are accurate and tell the true tale of the company.

Answer 12

ensure auditor independence

Question 13

The previous point feeds into this one.

Answer 13

be transparent

Question 14

essential for good corporate
governance.

Answer 14

transparency

Question 15

The __________ and __________ to share accurate, clear and easy-to-understand information with stakeholders, including shareholders, breeds trust and solidifies a business’s reputation.

Answer 15

openness and willingness

Question 16

This means that organizations have to accurately report the bad news as well as the good. Trying to avoid negative publicity only to be found out later is more damaging for a business and its reputation.

Answer 16

be transparent

Question 17

Full disclosure breeds integrity.

Answer 17

be transparent

Question 18

Shareholders should know their rights when they invest in your business and you should ensure that the rights you provide are backed up by your Articles of Association, constitution and company bylaws.

Answer 18

define shareholder right

Question 19

Decide whether all shareholders have the same voting rights or whether different classes of holdings have preference.

Answer 19

define shareholder rights

Question 20

Although short-term wins look good and create opportunities for publicity,
long-term value creation should be the aim of a company with solid governance.

Answer 20

aim for long term value creation

Question 21

A business that is committed to sustainable growth is likely to be much more volatile than a company with its eye only on the short term.
(t or f)

Answer 21

false (less volatile)

Question 22

Identifying risks is important, but taking a proactive approach to mitigate that risk before you face it is the goal.

Answer 22

manage risk proactively

Question 23

Rather than attempting to weather the storm, it is better for the organization to avoid the storm completely.

Answer 23

manage risk proactively

Question 24

an internal control framework and an up-to-date disaster recovery plan are all key to achieving this aim.

Answer 24

solid risk management process

Question 25

Consumers have also started to prefer shopping with businesses that boast sustainable practices.

Answer 25

follow sustainability best practices

Question 26

There should be easy-to-access documentation of your policies and procedures relating to shareholder rights, executive compensation, board meeting operation, the election of new directors, and more.

Answer 26

document policies and procedures

Question 27

This ensures transparency and consistency within the organization.

Answer 27

document policies and procedures

Question 28

the term that describes the situation when the goals of different interest groups coincide.

Answer 28

goal congruence

Question 29

a concept that refers to the alignment of goals between different levels of an organization or between individuals within an organization.

Answer 29

goal congruence

Question 30

The extent that individuals and groups perceive their own goals as being satisfied by the accomplishment of organizational goals.

Answer 30

the degree of integration of goals.

Question 31

two groups of organization

Answer 31

-subordinates -management

Question 32

direction of goals

Answer 32

1. moderate organizational accomplishment 2. little organizational accomplishment 3. no positive organizational accomplishment 4. successful goal congruence

Question 33

goals of management are somewhat compatible with the goals of the organization but are not exactly the same.

Answer 33

moderate organizational accomplishment

Question 34

a general disregard or the welfare of the organization. Both managers and workers see their own goals conflicting with those of the organization.

Answer 34

little organizational accomplishment

Question 35

the organizational goals can be so opposed that no positive progress is obtained.

Answer 35

no positive organizational accomplishment

Question 36

perceive their goals as being the same as the goals of the organization

Answer 36

successful goal congruence

Question 37

HOW TO ACHIEVE GOAL CONGRUENCE?

Answer 37

1. Set clear organizational goals. 2.Seek Input from employees 3. Share organizational goals 4. Designate accountable people 5. Align team goals 6. Share progress

Question 38

IMPORTANCE OF ALIGNING ORGANIZATIONAL, TEAM, AND EMPLOYEE GOALS

Answer 38

1. Goals set the tone for your organizational strategy. 2. Aligned goals connect employees and teams. 3. Priorities are clarified.