1. Stockholders have become an increasingly powerful and vocal stakeholder group in corporations. TRUE
2. The influence of the institutional sector of the stock market has grown over the past several decades. TRUE
3. Currently, most boards staff their compensation committees exclusively with outside directors. TRUE
4. It is responsibility of the board of directors and its audit committee to engage an independent accounting firm to audit the financial statements prepared by management. TRUE
5. Since the 1960s, there has been phenomenal growth in the numbers of institutional investors in the United States. TRUE
6. Consumer advocacy groups in the United States actively promote and speak for the interests of millions of consumers. TRUE
7. Strict new rules define what can properly be labeled “organic.” TRUE
8. One reason for business efforts to reform product liability laws in the increasing cost of insuring against liability suits. TRUE
9. Consumer cooperatives, credit unions, and consumer education programs generally have failed in promoting consumer interests. FALSE
10. The U.S. government became less active in the mid-1990s and early 2000s in promoting consumer interests. FALSE
11. In response to concerns about the lack of transparency in financial accounting, Congress passed a new law called the: C. Sarbanes-Oxley Act.
12. Reports filed with the SEC provide information on a company’s: D. All of the above.
13. Institutional investors are sometimes referred to as: B. Wall Street investors.
14. Investors may receive an economic benefits from the ownership of stock by receiving: D. Both B and C, but not A.
15. Corporate governance involves the exercise of control over a company’s: B. Entire operations.
16. The directors of a company are a central factor in corporate governance because they: A. Exercise formal legal authority over company policy.
17. Which of the following is true about corporate boards? A. Corporate boards average 11 members.