FEM11118: ADVANCED CORPORATE
FINANCE AND GOVERNANCE
LECTURE 6
CORPORATE GOVERNANCE:
BOARD OF DIRECTORS
,TODAY
Corporate governance codes
On country level
Board of directors
RvC
Legal systems
Corporate governance and performance
2
,REQUIRED READING
Denis, D.K., J.J. McConnell, 2003.
International corporate governance. Journal of
Financial and Quantitative Analysis 38 (1), 1-
36.
3
, CORPORATE GOVERNANCE
Deals with the ways in which suppliers of finance to
corporations assure themselves of getting a return on
their investment
Separation of ownership and control leads to agency
problems Principal investing money and agent acting/making decisions on the principals behalf
03:30 for agency problems
Ownership concentration
Large vs. small shareholders has effect on
- Overinvestments
- Empire building
how managers are monitored. Threat of - Expropriation
takeover also plays a role =fraud
Executive compensation
- managers staying at job too long
4
FINANCE AND GOVERNANCE
LECTURE 6
CORPORATE GOVERNANCE:
BOARD OF DIRECTORS
,TODAY
Corporate governance codes
On country level
Board of directors
RvC
Legal systems
Corporate governance and performance
2
,REQUIRED READING
Denis, D.K., J.J. McConnell, 2003.
International corporate governance. Journal of
Financial and Quantitative Analysis 38 (1), 1-
36.
3
, CORPORATE GOVERNANCE
Deals with the ways in which suppliers of finance to
corporations assure themselves of getting a return on
their investment
Separation of ownership and control leads to agency
problems Principal investing money and agent acting/making decisions on the principals behalf
03:30 for agency problems
Ownership concentration
Large vs. small shareholders has effect on
- Overinvestments
- Empire building
how managers are monitored. Threat of - Expropriation
takeover also plays a role =fraud
Executive compensation
- managers staying at job too long
4
