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Rout is the CEO of Shaw Root Beer, which is a publicly traded firm. The shareholders...

Rout is the CEO of Shaw Root Beer, which is a publicly traded firm. The shareholders want Rout on the board of directors despite her recent appointment as the CEO. This decision of the shareholders is most likely because Rout is

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more likely than other board members to accept a small bonus

likely to provide the board with valuable inside information

also the CEO of other firms

a board member of a major supplier

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Answer #1

also the CEO of other firms

This decision of the shareholders is most likely because Rout is also the CEO of other firms. If a person is serving as a CEO of any firm, then it is unethical for that person to serve as the board of director for that firm or other firms because it serves as a conflict of interest for that person and the firms since there is natural conflict of interest for executives to serve equally on the entity that supervises them.

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