Question

The CEO of Alta Corp. is dismayed by a lack of effort and insights his directors provide during board meetings. The directors are all outsiders, experienced, and run their own successful firms. The CEO genuinely seeks their greater involvement. What would you recommend?

A) Requiring that the directors own stock in the company.
B) Implementing a director appraisal system.
C) Electing an lead director.
D) All of these choices would increase involvement.

Answer 1

Option D) All of these choices would increase involvement.

Step-by-step explanation:

Corporate governance

This is simply defined as ways used to manage the relationship among stakeholders and to show and control the strategic direction and the firms or organization's performance.

In the United States and some other countries, the primary goal of a firm or organizations is to maximize profits so as to provide a financial gain to its shareholders. Lack of effort and insight can reduce the output generated by firms.

The fact that the directors has no share in the company may be one reason why they are not putting their maximum effort. By giving them little shares in the company, they would put great effort into work so that they can yield more profit. An appraisal will also help them to put effort into work since they are being monitored. And lastly, having a leader can help lead the others into the right direction and focus on meeting goals and objectives of the firm.