corp governance

Question 1

Klaus Schwab, the Chairman of the World Economic Forum, is an advocate of:

Answer 1

Stakeholder capitalism

Question 2

ESG Stands for

Answer 2

Environmental Social Governance

Question 3

Compared to maximizing shareholder wealth, when directors maximize the interest of stakeholders with fixed claims, a company will

Answer 3

take on fewer risky projects.

Question 4

The ranking of projects by residual claimants is ___ the ranking by fixed claimants

Answer 4

reverse of

Question 5

The change in Canadian corporate law from shareholder wealth maximization to balancing stakeholder interest happened because of:

Answer 5

Supreme court ruling BCE case

Question 6

A principal-agent problem is:

Answer 6

in interests and principles that also when one person takes actions on behalf of another

Question 7

A ‘fiduciary’ duty is a duty of:

Answer 7

A duty of care, loyaly, and good faith owed by an agent to a principal.
Principal = shareholders
Agents: Directors and managers

Question 8

Under Canadian common law, up until The Peoples case of 2004, the duty of the directors was to the corporation where the corporation was understood to mean the __________. Since the Peoples case, the corporation has been interpreted to mean the ___________ .

Answer 8

Shareholders, stakeholders

Question 9

Which of the following establishes the principle that the interests of the shareholders should prevail over other stakeholders’ interests?

Answer 9

1. Stakeholder capitalism = communism/socialism
2. complexity
3. Ambiguous
4. Undemocratic
5. Activism with other people’s
   money
6. PR smokescreen
7. Reduces Innovation

Question 10

According to Adam Smith, we can expect our dinner from the butcher, the brewer and the baker because of:

Answer 10

It serves their self interests

Question 11

Under the Stakeholder model of governance, who chooses which social goals the company
focuses on?

Answer 11

The public

Question 12

How do members of the board of directors get their job?

Answer 12

Elected by shareholders

Question 13

Which of the following are residual claimants?

Answer 13

stockholders

Question 14

Why did State Street Global Advisors start the SHE ETF and commission Fearless Girl?

Answer 14

Push to get more women into corporate positions

Question 15

Who said “The Social Responsibility of Business Is to Increase Its Profits”?

Answer 15

Milton Friedman