Corporate governance1.1_2010

Corporate governance1.1_2010 - Corporate governance...

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Click to edit Master subtitle style 8/22/11 Corporate governance Introduction What is corporate governance Board and CEO
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8/22/11 What is governance? General: the act or process of governing Corporate governance – the act or process of governing a corporation Why is governance important Remember principal agent model Principal – investors Agent – management
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8/22/11 Corporations Free market economic system Public corporation pros: Unlimited life Limited liability of owners Easy transfer of ownership Public corporation cons: Many small owners – little information
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8/22/11 Structure {168A81A1-3 CF-4CB6-97E1-9F2FEB70EFC } CEO (management) {383B65DF-D31E-4F 4-94D0-F90BEA67C306} Board of directors {AF14520A-0754-4 6F-BF4E-6C0 7E671487} Shareholder (owner) 1 {E C4 24C-89F9-4B9 -BC47-1B3D83257898} Shareholder (owner) 2
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8/22/11 Corporation stakeholders Customers Employees Suppliers Creditors Distributors Community Fulfilling the needs of all stakeholders means ownership’s interests are
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8/22/11 Legal obligations of directors Who makes the rules? Federal laws Stock exchanges Industry associations State laws Who makes the rules for a specific BOD? The articles of incorporation of the
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8/22/11 Responsibilities of directors Fiduciary duty Being trustworthy and acting in the best interest if the shareholders whom the director represents Two components: integrity and competence The duty of loyalty and the duty of fair dealing Being loyal to the corporation – not
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8/22/11 Responsibilities of directors The duty of care Act carefully in carrying out responsibilities – act in the best interests
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Corporate governance1.1_2010 - Corporate governance...

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