Lecture 9 corruption 2013

Systemic fraud eg libor 4 tax evasion 4 111013 what

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Unformatted text preview: Uzbekistan 17 172 Myanmar 15 173 Sudan 13 174 Afghanistan 8 174 Korea (North) 8 174 Somalia 8 B. Poli0cal corrup0on •  1. Corporate contribu0ons to poli0cal pari0es and candidates –  USA: no limit on corporate spending  ­ ­ Ci0zens United –  Canada: limits •  2. Control of poli0cal agenda –  why is behaviour of corps, even financial corps, not a big part of poli0cal discussion in USA? –  Why are government deficits seen as far more important than crea0ng jobs? C. Business fraud and corrup0on •  •  •  •  1. Fraud (mortgage fraud) 2. Control Fraud (Enron, Tyco) 3. Systemic Fraud (e.g. LIBOR) 4. Tax evasion 4 11/10/13 What is the best way for Boards of Directors and shareholders to make sure CEO doesn’t run firm to maximise her/his own benefit? A.  Pay CEO in stock op0ons B.  Hire an honest CEO C.  Spy on CEO D.  Hire excellent independent auditors E.  No one really knows The Agency Problem •  How can the owners of a corpora0on make sure the managers run the corporate in the owner’s interests? How do you keep CEOs from running the company for their own benefit? •  Answer: Stock op...
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This note was uploaded on 01/13/2014 for the course ADMN 3400 taught by Professor Johnbishop during the Fall '13 term at Trent University.

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