(A) Internal and external corporate governance provisions and activities can take many forms, including a classified board. Which of the following best descibes this practice?

1. This practice requires that only a fraction of a firm's board of directors will be elected in each election.

2. This practice encourages the classification of board members as insiders or outsiders, depending upon their role or relationship with the company.

3. This practice requires that 100% of the members of a firm's board of directors be elected in each election.

(B) If you were designing the composition and acceptable practices for the board of directors of a new corporation, which of the following practices would you suggest be implemented?

Suggested Practice	Yes, recommend implementation	No, do not recommend implementation
The board should recommend that the company keep financial records and report financial statements that are in compliance with generally accepted accounting standards.
The company's charter should prohibit the use of a classified board of directors.
The ratio of outside to inside board members should be one outside member for every four inside members.
Senior management's cash bonuses should be tied solely to the firm's short-term operating profit performance.