CH10_INSTRUCTORMANUAL_HIH9E - Chapter 10: Corporate...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 10: Corporate Governance Chapter 10 Corporate Governance KNOWLEDGE OBJECTIVES 1. Define corporate governance and explain why it is used to monitor and control managers’ strategic decisions. 2. Explain why ownership has been largely separated from managerial control in the corporation. 3. Define an agency relationship and managerial opportunism and describe their strategic implications. 4. Explain how three internal governance mechanisms—ownership concentration, the board of directors, and executive compensation—are used to monitor and control managerial decisions. 5. Discuss the types of compensation executives receive and their effects on strategic decisions. 6. Describe how the external corporate governance mechanism—the market for corporate control—acts as a restraint on top-level managers’ strategic decisions. 7. Discuss the use of corporate governance in international settings, especially in German, Japan, and China. 8. Describe how corporate governance fosters ethical strategic decisions and the importance of such behaviors on the part of top level executives. CHAPTER OUTLINE Opening Case Is CEO Pay Outrageous, Irresponsible, or Greedy? SEPARATION OF OWNERSHIP AND MANAGERIAL CONTROL Agency Relationships Product Diversification as an Example of an Agency Problem Agency Costs and Governance Mechanisms OWNERSHIP CONCENTRATION The Growing Influence of Institutional Owners BOARD OF DIRECTORS Enhancing the Effectiveness of the Board of Directors Strategic Focus Where Have All the Good Directors Gone? Executive Compensation The Effectiveness of Executive Compensation MARKET FOR CORPORATE CONTROL Managerial Defense Tactics INTERNATIONAL CORPORATE GOVERNANCE Corporate Governance in Germany and Japan Corporate Governance in China Global Corporate Governance Strategic Focus The Satyam Truth: CEO Fraud and Corporate Governance Failure GOVERNANCE MECHANISMS AND ETHICAL BEHAVIOR SUMMARY REVIEW QUESTIONS EXPERIENTIAL EXERCISES VIDEO CASE NOTES 10-1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 10: Corporate Governance LECTURE NOTES Chapter Introduction : The purpose of this chapter is to present and discuss how shareholders (owners) can ensure that managers develop and implement strategic decisions in the best interests of the shareholders (owners) and not be primarily self-serving (working for the best interests of managers only, to the detriment of shareholders). In the absence of effective internal governance mechanisms, the market for corporate control—an external governance mechanism—may be activated. While it is a subject most frequently associated with firms in the U.S. and the U.K., the effectiveness of governance is gaining attention throughout the world. The chapter begins by describing the relationship that provides the foundation on which the modern corporation is built—i.e., the relationship between owners and managers. However, the majority of this chapter is devoted to an explanation of various mechanisms owners use to govern managers and ensure maximization of shareholder value. OPENING CASE
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/21/2011 for the course ACCOUNTING 101 taught by Professor Fenjimo during the Spring '11 term at College of Southern Idaho.

Page1 / 24

CH10_INSTRUCTORMANUAL_HIH9E - Chapter 10: Corporate...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online