BMGT 892 - Corporate Governance

BMGT 892- - CORPORATE GOVERNANCE What is cor porat e gover nance and why is it necessar y What is the first pr ior ity of top managers 1

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Unformatted text preview: CORPORATE GOVERNANCE What is cor porat e gover nance and why is it necessar y? What is the first pr ior ity of top managers? 1) Participating in growing markets 2) Taking market share away from competitors 3) Consolidating industry via horizontal integration 4) Developing new markets Maximizing shareholder value by… Maximizing shareholder value by… Stockholders receive their returns as: Stockholders receive their returns as: • Dividend payments • Capital appreciation in market value of shares What else? But... Also must be aware of other stakeholders Who are a company’s stakeholders? Stakeholders and Cor porate Per for mance • Stakeholders: I ndividuals/groups with an interest/claim/or stake in company Stakeholders and the Ent er pr ise Company must consider stakeholder claims in developing & implementing strategy Stakeholder I mpact Analysis I dentify: • Stakeholders • Stakeholders’ interests/concer ns • Claims stakeholders likely to make • Stakeholders most impor tant from organization’s perspective • Resulting strategic challenges What is agency theor y? Agency Theor y Pr incipal-Agent Relationships Pr incipal Agent Agency relationship - whenever one party delegates decision-making authority or control over resources to another. Authority Authority Agency Theor y Agency Problems ar ise because: • Agents & pr incipals may have different goals • Risk tolerance • Time hor izon • Agents may take advantage of infor mation...
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This note was uploaded on 06/07/2011 for the course BMGT 892 taught by Professor Donsmith during the Spring '11 term at UNL.

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BMGT 892- - CORPORATE GOVERNANCE What is cor porat e gover nance and why is it necessar y What is the first pr ior ity of top managers 1

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