Accordingly four perspectives financial how do we look

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Unformatted text preview: perspectives – Financial: "How do we look to shareholders?" look – Customer: "How do customers see us?" customers – Internal business processes: "What must we excel at?" excel – Learning and growth: "How can we continue to improve, create value and innovate?". innovate?". 12 Corporate Governance around Corporate the World the Governance and the Public Corporation The Agency Problem Remedies for the Agency Problem Law and Corporate Governance Corporate Governance Reform 13 The Agency Problem Shareholders vs management – Shareholders allocate decision-making authority to the managers managers » A shareholder with a diversified portfolio would not shareholder have the time to devote to making the numerous decisions at each of his many companies anyway decisions – Managers might be tempted to act in the manager’s shortterm best interest term » Consumption of lavish perquisites » Outright stealing Controlling shareholders vs minority shareholders Shareholders vs debtholders 14 Boundary of firms 15 16 Remedies for the Agency Remedies Problem Problem Board of directors Incentive Contracts Concentrated Ownership Debt The Market for Corporate Control Overseas Stock Listing 17 Gillan (JEF06): On Corporate Governance 18 Structure and legal charge of corporate Structure boards boards...
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