Corporate governance: Methods for influencing management's decisions Corporate governance refers to policies and rules, regulations and laws, and activities that (1) influence both management's decisions and its company's operations, and (2) affect the relationships between a business's stakeholders. These stakeholders include the company's executives and managers, shareholders, creditors, current and former employees, competitors, and local and global communities. These governing forces are both internal and external to the organization, and can either align management's interests with those of their shareholders (a positive outcome) or further entrench the firm's management (a not-so-positive outcome). An entrenched management is one that is_____likely to be removed, all other things remaining equal. In simple terms, corporate governance provisions can take two forms:_____and_____, with the former intended to provide_____reinforcement for undertaking activities that are beneficial to the firm's stakeholders, and the latter intended to______management for its undesirable decisions or actions. Internal and external corporate governance provisions and activities can take many forms, including a targeted share repurchase provision. Which of the following best describes this technique? This procedure for facilitating a takeover and changing a firm's management involves repurchasing, for a fraction of their market value, the shares owned by the firm's board members. This method of resisting a takeover involves the repurchase of shares from a firm threatening a hostile takeover. This anti-takeover tactic requires the firm to automatically confiscate and sell the shares of an individual shareholder who owns more than a specified amount of a target company's stock. If you were making recommendations to repair a dysfunctional board of directors, which of the following practices would you suggest be implemented? Check all that apply. The company's charter should not contain a shareholder rights provision. Members serving on the board's audit committee should be "independent." The CEO should sign the company's financial statements without reviewing them-provided that the CFO has already signed them-since he or she knows that the CFO's signature means the statements are accurate and in good form. Management's compensation should consist of a cash salary and a bonus that is linked to the firm's performance and the value of its common shares