carpenter_ppt_ch13_ed2

carpenter_ppt_ch13_ed2 - Chapter 13 Corporate Governance in...

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Chapter 13 Corporate Governance in the Twenty-First Century
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2 OBJECTIVES Explain what is meant by corporate governance 1 Describe how corporate governance relates to competitive advantage and understand its basic principles and practices 2 Identify the roles of owners and different types of ownership profiles in corporate governance 3 Describe how boards of directors are structured and the roles they play in corporate governance 4 Explain and design executive incentives as a corporate governance device 5 Describe how the market for corporate control is related to corporate governance 6 Compare and contrast corporate governance practices around the world 7
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3 CORPORATE GOVERNANCE AT HEWLETT-PACKARD Corporate Governance in Action: A new business term is coined – Pretexting: approaching a company under the pretext of being someone else.
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4 SUNBEAM Al Dunlap’s mgmt. philosophy 1. Shareholders are most important corporate constituents 2. Most corporations have bloated bureaucracies 3. Drastic layoffs are usually needed to save failing companies 4. Layoffs should be quick, one-time events 5. CEOs should be rewarded like stars when they perform well and fired when they do not 6. Board members should have significant personal investments in the company Results Board fines Dunlap He looses his stock options Sunbeam stock is delisted product development hampered Growth fails to meet targets Company accused of “channel stuffing” Costs slashed Stock doubled in first month Market cap rises from $1.1 billion to $5 billion Early success Failure Signs of problems
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5 CHAINSAW AL “The last dirty secret in the corporate world is how directors live off the fat of a business that is not their employer. I started a revolution by insisting that Scott directors be paid only in stock.” - Al Dunlap
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This note was uploaded on 01/11/2012 for the course BUS 202 taught by Professor Howser during the Spring '11 term at NYU.

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carpenter_ppt_ch13_ed2 - Chapter 13 Corporate Governance in...

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