The annual review of American company board practices by Korn/Ferry, a firm of headhunters, is a useful indicator of the health of corporate governance. This year's review, published on November 12th, shows that the Sarbanes-Oxley Act, passed in 2002 to try to prevent a repeat of corporate collapses such as Enron's and WorldCom's, has had an impact on the boardroom—albeit at an average implementation cost that Korn/Ferry estimates at $5.1 m per firm. Two years ago, only 41% of American firms said they regularly held meetings of directors without their chief executive present; this year the figure was 93%. But some things have been surprisingly unaffected by the backlash against corporate scandals. For example, despite a growing feeling that former chief executives should not sit on their company's board, the percentage of American firms where they do has actually edged up, from 23% in 2003 to 25% in 2004. Also, disappointingly few firms have split the jobs of chairman and chief executive. Another survey of American boards published this week, by A.T. Kearney, a firm of consultants, found that in 2002 14% of the boards of S&P 500 firms had separated the roles, and a further 16% said they planned to do so. But by 2004 only 23% overall had taken the plunge. A survey earlier in the year by consultants at McKinsey found that 70% of American directors and investors supported the idea of splitting the jobs, which is standard practice in Europe. Another disappointment is the slow progress in abolishing "staggered" boards—ones where only one-third of the directors are up for re-election each year, to three-year terms. Invented as a defence against takeover, such boards, according to a new Harvard Law School study by Lucian Bebchuk and Alma Cohen, are unambiguously "associated with an economically significant reduction in firm value". Despite this, the percentage of S&P 500 firms with staggered boards has fallen only slightly—from 63% in 2001 to 60% in 2003, according to the Investor Responsibility Research Centre. And many of those firms that have been forced by shareholders to abolish the system are doing so only slowly. Merck, a pharmaceutical company in trouble over the possible side-effects of its arthritis drug Vioxx, is allowing its directors to run their full term before introducing a system in which they are all re-elected (or otherwise) annually. Other companies' staggered boards are entrenched in their corporate charters, which cannot be amended by a shareholders' vote. Anyone who expected the scandals of 2001 to bring about rapid change in the balance of power between managers and owners was, at best, naive.
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The Sarbanes-Oxley Act is most probably about ______. A. corporate scandal B. corporate management C. corporate cost D. corporate governance
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The word "backlash" (Line 3, Paragraph 2) most probably means ______. A. a violent force B. a strong impetus C. a firm measure D. a strong negative reaction
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According to the text, separating the roles between chairman and chief executive is ______. A. a common practice in American companies B. what many European companies do C. a must to keep the health of a company D. not a popular idea among American entrepreneurs
单选题
We learn from the text that a "staggered" board ______. A. is adverse to the increment of firm value B. gives its board members too much power C. has been abolished by most American companies D. can be voted down by shareholders