Chapter 7

Question 1

What is stewardship theory?

Answer 1

Management are stewards of organisation

Question 2

What is agency theory?

Answer 2

Management seek to run for their own self interest

Question 3

What is stakeholder theory?

Answer 3

Management has duty of care not just to owners but to wider community

Question 4

What are features of poor governance?

Answer 4

Domination by an individual, lack of involvement in board, lack of control function, lack of supervision, lack of independent scrutiny , lack of contact with shareholders, emphasise short term profitability and misleading accounts and information

Question 5

Division of responsibility?

Answer 5

simply achieved by having separate chair and chief executive

Question 6

What were Friedmans arguments against CSR?

Answer 6

businesses do not have responsibilities, aim is to make money, if have social responsibilities then act against employer interest and spending others money for own purpose