Introduction - What is Corporate Governance?

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Lecture 6: Corporate Governance Notes (Part 1) Prepared by: Associate Professor Dr. Cheah You Sum Centre for Commercial Law and Justice
Corporate Governance - Introduction 1. Introduction - What is Corporate Governance? A set of corporate rules, practices and processes , design to provide guidance for good governance in corporate settings. The focus is on the Board of Directors , (on how they direct the company?) and the body of shareholders (what value they gained and the role they play in overseeing the performance of the Board).
Corporate Governance - Introduction 1. Introduction - What is Corporate Governance? This set of rules are primarily voluntary for most companies except public listed company, where there are required to comply or adopt alternative. The question is why another set of rule and not law? It has to do with the economic function of corporate law ( see Farrar on Company Law )
Corporate Governance - Introduction 1. Introduction - What is Corporate Governance?
Corporate Governance - Introduction 1. Introduction - What Caused the Impetus of Corporate Governance? Corporate scandals – some examples Enron - US$600 million. Adelphia - > US$ 10 billion. Parmalat – US$ 185 million.
Corporate Governance - Introduction 1. Introduction - What Caused the Impetus of Corporate Governance? Corporate scandals – some examples Global Crossing, Ltd. emerged as a colossal figure in the telecommunication industry - knowingly sold more than $1.5 billion of artificially inflated company stock TYCO – CEO and CFO swindle over $170 million in corporate loans without proper disclosures, approvals, and notifications, and had pocketed approximately $430 million by misstating Tyco's finances .
Corporate Governance - Introduction 1. Introduction - What Caused the Impetus of Corporate Governance? Corporate scandals – local examples BBMB – USD 1 Billion. Perwaja Steel – USD 10 Billion PKFZ - USD 12.5 Billion Bank Negara Malaysia – USD 30 Billion 1MDB – USD 42 Billion
Corporate Governance - Introduction

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