Chapter 10 - CG Chapter 10 The reality of the Boardroom...

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CG Chapter 10 „The reality of the Boardroom“ Sources of Governance Power - corporate governance can be thought of as the way power is exercised over corporate entities - Mary Parker Follets definition of power: „power ist he ability to make things happen“ A board can also find itself influenced in a number of ways, for example: by a dominant shareholder or group of shareholders putting pressure on the board from the threat of a potential takeover by the prospect of litigation through the influence of the auditors from the effects of legislation and regulation from media pressure and other external exhortation from the risk of damage to personal reputations by a dominant or charismatic leader through changing business circumstances The power of individual directors also derives from a variety of sources: personality power (charismatic or dominant individual) knowledge power (access to information, skills) sanction power, which ist he powert hat exists if a director can apply some sanctions to the company or to other directors political power interpersonal powert hat one person might have over others organizational power networking power societal power (influence in society) ownership power and the ability to determine board membership respresentative power Games Directors Play and the Maniuplation of Meetings A few game directors play: *alliances two or more members of the board conspire together to influence a board decision (f.e. two executive directors work togehter to prevent the introduction of a proposed management control system)
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