In 2003, Sony Corporation announced reform in its management structure. The reform included an increase in the number of outside directors on the Board of Directors, a requirement to separate the Chairman of the Board from the CEO, and greater inclusion of outside directors on the Nomination Committee. Analyze these changes from the perspective of separation of decision control from decision management.
What will be an ideal response?
Outside directors are only involved in decision control, unlike inside directors who are likely to exercise decision control as well as perform management functions. The inclusion of outside directors should improve decision control since there will be less "capture" by top management. Similarly, prohibiting the CEO from chairing the board reduces the amount of decision control authority vested in the CEO, who is also the principal manager with decision management rights. Finally, outside directors are more likely to nominate future board members who have no personal relationships with executives in the company - fewer favors traded between those having decision control and those having decision management.
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The expression "There's no such thing as a free lunch" means that
a. services may be free, but goods are never free b. even if it has a price of zero, a good or service has a cost c. charitable organizations should not serve free lunches to the poor d. poor people are really the ones who pay for their allegedly free lunches e. someone has to pay the market price for a good or service
Most of the poverty in this country can be traced to
A. the recession that began in 1990. B. the heritage of slavery. C. five decades of social and economic change. D. the War on Poverty.
Suppose the United States is experiencing a balance of payments surplus. To prevent the exchange rate from appreciating, the U.S. Treasury must:
A. sell foreign currency and buy dollars. B. sell dollars and buy foreign currency. C. sell both dollars and foreign currency. D. buy both dollars and foreign currency.
In the United States between 1933 and 1937, aggregate output
A. increased even though this was during the Great Depression. B. decreased as this was during the Great Depression. C. decreased even though the economy was finally out of the Great Depression. D. increased since the economy was finally out of the Great Depression.