Complete the fill-in-the-blank questions below to test your knowledge of the material in chapter 3 of the textbook.
1
The UK and many other countries use the 'comply or ' approach in their corporate governance codes.
This means that companies can either comply with the provisions of the code or they can explain in what way(s) they do not comply.
Page reference: 24
2
The Cadbury Code of Best Practice (1992) stated that 'executive directors' pay should be subject to the recommendations of a remuneration committee made up wholly or mainly of directors'.
The non-executive directors should bring independent judgement to the remuneration decision process.
3
The OECD Principles of Corporate Governance (2004) include 'the treatment of shareholders'.
It is an important aspect of corporate governance that all shareholders are treated fairly and have the same rights (for any given class of share).
Page reference: 32
4
The state of in the United States of America is the state in which many companies choose to register as it has built up a body of corporate case law which is generally seen as 'company friendly'.
The majority of US companies listed on the New York Stock Exchange are registered in Delaware in order to be able to take advantage of the more flexible non-prescriptive approach.
5
The Basle Committee's guidelines relate to enhancing corporate governance in organizations.
The original guidance was published in 1999 and the revised guidance was published in 2006 and consisted of eight corporate governance principles.
