Chapter 6 Multiple Choice Questions

Shareholders and business ethics
. Managers are entrusted to run the company in the best interest of ________. Specifically, they have a duty to act for the benefit of the company, as well as a duty of ________ and of _______.

. The relationship between shareholders and the company, or so called ________, describes shareholders as _________ and managers of the company as ________.

. The so-called BRIC countries (Brazil, Russia, India and _______) tend to follow a __________ approach to corporate governance. However, recently this has tended to move towards more _______-based mechanisms.

. Which of the following factors are important when discussing national corporate governance regimes?
1. Pressures in favour of a convergence in governance models;
2. Considerable levels of heterogeneity in governance systems described as being the same or similar;
3. Corporate governance deviance occurring due to internal firm pressures;
4. The Anglo-American model being considered the best model in light of the recession in the late 2000s.

. Which of the following statements are correct?
1. Executive directors provide a link between managers and shareholders;
2. Non-executive directors are responsible for running the firm;
3. Executive directors' job is to ensure that the corporation is being run in the best interests of the shareholders;
4. Executive directors are responsible for running the firm.

. To ensure the independence of the non-executive board members, they are a number of steps which can be taken, which include non-executives being drawn from _______ the company, being appointed for a _________ time period as well as being appointed _________.

. In order to try and align the interest of shareholders and senior management of a company, _________ are often made available to _______ of a company, to ensure that it is in their interests to increase _______ and dividend performance.

. Which of the following statements regarding the ethical issues associated with insider trading are correct?
1. There is inherent unfairness when one party trades with superior knowledge;
2. The knowledge used by insider traders is misappropriated from the firm involved;
3. The actions of insider traders increase investor confidence in financial markets;
4. Insider trading undermines the fiduciary relationship.

. _______ such as bitcoin are becoming increasingly mainstream and have a whole host of associated ethical implications, for example, they are______ and more ______. However, they have also been used to engage in _______.

. Some of key differences between Islamic finance and conventional finance include - prohibition of charging and paying _______, prohibition on ______ and ______ transactions, prohibition of sinful investment and requirement for all financial products to be backed by __________.

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