In a short essay, describe and evaluate Strebel’s contingent perspective of corporate governance.
What will be an ideal response?
Auditing Role
This role occurs when there is an effective top management within the firm, and the externalities facing the firm are insignificant. The board can focus on the financial aspects of the firm’s operations. The role of the board usually occurs in a stable business environment that does not require large levels of new investment.
Supervising Role
The supervising role includes ensuring that the needs of critical stakeholders are addressed in the strategic decision-making process. As a result, the board focuses on strategic, societal, and risk-related issues to make sure the firm has strategic fit with these issues.
Coaching Role
The board takes a coaching role when the management has not been effective with the
development of their strategic focus. A coaching board seeks active participation in the decision-making process to help the top level manager make the most effective strategic decision. As a result, the board has the time to give advice on how the firm should proceed strategically.
Steering Role
In a steering role, the management is ineffective in making strong strategic decisions, and
externalities have a significant impact on the firm. The board becomes actively involved in both the short-term and long-term strategic focus of the firm in an attempt for the firm to survive in the long term. An incompetent CEO will be replaced with a board member until a permanent replacement can be selected. In addition, the board addresses the unmet needs of critical stakeholders.
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a. $30,500; b. $18,500; c. $17,000; d. $12,000; e. $1,500
Which of the following is an inventory valuation method?
a. First-in, first-out b. Average-cost c. Lower-of-cost-or-market d. Perpetual
Which of the following is outlawed under the Taft-Hartley Act of 1947?
A. Union shop agreements. B. Agency shop agreements. C. Open shop agreements. D. Closed shop agreements.
The cost formula for monthly depreciation cost in a factory is: Total cost = $10,000 This cost
A) is strictly variable B) is strictly fixed C) is a mixed cost D) is a step cost