Which of the following statements is FALSE?
A) The incentives come from owning stock in the company and from compensation that is sensitive to performance.
B) The role of the corporate governance system is to mitigate the conflict of interest that results from the combination of ownership and control without unduly burdening managers with the risk of the firm.
C) Punishment comes when a board fires a manager for poor performance or fraud, or when, upon failure of the board to act, shareholders or raiders launch control contests to replace the board and management.
D) The corporate governance system attempts to align interests by providing incentives for taking the right action and punishments for taking the wrong action.
B
Explanation: B) The role of the corporate governance system is to mitigate the conflict of interest that results from the separation of ownership and control without unduly burdening managers with the risk of the firm.
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Is it warranted?
What will be an ideal response?
Dooley Company has the following information available for variable overhead costs. Direct labor hours are the cost driver for variable overhead costs
Actual variable overhead costs $4,700 Standard variable overhead costs $1.20 per hour Actual direct labor hours 3,750 hours Standard direct labor hours per unit 5 hours Units produced 700 What is the variable overhead efficiency variance? A) $300 Favorable B) $300 Unfavorable C) $500 Favorable D) $500 Unfavorable