PRA CTICE OBJE CTIVE TEST QUESTIONS :
SECTION 1
K APLA N
PUBLISH ING
31
136
Deontological ethics suggest that the consequences of an action should be ignored.
Is this statement TRUE or FALSE?
A True
B False
(1 mark)
GOVERNANCE AND SOCIAL RESPONSIBILITY IN BUSINESS
137 Where there are a large number of external shareholders who play no role in the day-to-
day running of a company, there is a situation that is described as:
A
detached corporate ownership
B uninvolved
external
ownership
C
dividend based shareholding
D
separation
of ownership and control
(2 marks)
138 The ‘agency problem’ refers to which of the following situations?
A
Shareholders acting in their own short-term interests rather than the long-term
interests of the company
B
A vocal minority of shareholders expecting the directors
to act as their agents and
pay substantial dividends
C
Companies reliant upon substantial government contracts such that they are
effectively agents
of the government
D
The directors acting in their own interests rather than the shareholders’ interests
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