Financial reporting and external audit
Oversee financial reporting and disclosure.
Monitor the choice of accounting principles.
Hire and monitor the work of the external auditor.
Oversee the internal
Board of Directors
WHY DO PUBLIC COMPANIES NEED A
To effectively serve the monitoring and advisory roles,
board members need to maintain independence from the
NYSE requires that
MARKET FOR CORPORATE
When the value of the firm to the potential new owner,
minus transaction costs associated with the deal, is
greater than the value of the firm to the current owners,
the potential new owner has incentives t
Both financial and non-financial measures are used.
Pros: historical results, limited predictive ability for
Cons: can be accurately mea