Orthe concentrationoffreeriders trustees mutualfunds

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Unformatted text preview: hase Manhattan ­ This Minimizes the agency problem Copyright 2013 Copyright 2013 Board of Directors & Diverse Ownership: Con’t Consider: Is the diverse shareholder (and resulting agency cost) primarily a U.S. problem? – Only owner/operator may minimize? Banks Is the U.S. solving this problem with ‘concentration of shareholder power’? ­ or the concentration of free riders? Trustees Mutual Funds Pension Funds Copyright 2013 Copyright 2013 Con’t: Is the threat of takeover (the ultimate manifestation of ‘concentrator’ of power) the only mechanism that corporate governance has that is effective? – Equity Holders Is forcing bankruptcy another effective tool of corporate governance? – Debt Holders Copyright 2013 Copyright 2013 Con’t: Does the concentration of ownership resolve the agency problem? – What about minority shareholders? – Does equity concentration encourage excessive risk? – Get rewards ­ Spread failure to creditors – Does debt concentration restrict risk? – Does concentration have an impact on shareholders? What is it? Copyright 2013 Copyright 2013 Issue: U.S. trend to lowering restrictions on bank/corporate ownership ­ Moving away from G­5 Wh...
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