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Unformatted text preview: perspectives
– Financial: "How do we
look to shareholders?"
– Customer: "How do
customers see us?"
– Internal business
processes: "What must we
– Learning and growth:
"How can we continue to
improve, create value and
12 Corporate Governance around
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
» A shareholder with a diversified portfolio would not
have the time to devote to making the numerous
decisions at each of his many companies anyway
– Managers might be tempted to act in the manager’s shortterm best interest
» Consumption of lavish perquisites
» Outright stealing Controlling shareholders vs minority shareholders
Shareholders vs debtholders
14 Boundary of firms 15 16 Remedies for the Agency
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
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This document was uploaded on 01/15/2014.
- Fall '14