Practice question · Select all that apply
Which are recognized governance mechanisms for disciplining managers?
Hints
- Each mechanism must create accountability, not remove it.
- Guaranteed tenure removes exactly what the others build.
Show the answer
- A. Equity-linked compensation
- B. The threat of hostile takeover
- D. An independent board of directors
Why
Boards monitor, equity aligns, takeovers punish. Unconditional tenure removes the very accountability the other three create.
Practise Corporate Governance
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