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Encyclopedia > Corporate governance
Companies law
Basic forms:
Sole proprietorship
Partnership
(General · Limited · LLP)
Corporation
(LLC)
Cooperative
United States:
Business trust
LLLP · Series LLC
Delaware corporation
Nevada corporation
United Kingdom / Commonwealth / Ireland:
Limited company
(By shares · By guarantee)
(Public · Proprietary)
Community interest company
Civil law countries:
AB · AG · ANS · A/S · AS
K.K. · N.V. · OY · S.A. · GmbH
SE
Doctrines
Corporate governance
Limited liability · Ultra vires
Business judgment rule
Internal affairs doctrine
De facto corporation and
corporation by estoppel
Piercing the corporate veil
Rochdale Principles
Related areas of law
Contract · Civil procedure

Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way in which a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many players involved (the stakeholders) and the goals for which the corporation is governed. The principal players are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large. Image File history File links Scale_of_justice. ... Companies law is the field of law concerning business and other organizations. ... A sole proprietorship, or simply proprietorship, is a type of business entity which legally has no separate existence from its owner. ... A partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested. ... This article needs to be wikified. ... A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners (GPs), there are one or more limited partners (LPs). ... A limited liability partnership (LLP) has elements of partnerships and corporations. ... For other uses, see Corporation (disambiguation). ... This article is about a U.S.-specific corporate form; for a general discussion of entities with limited liability, see corporation. ... For other uses, see Coop. ... A Massachusetts business trust or MBT is a legal trust set up for the purposes of business in the state of Massachusetts. ... The limited liability limited partnership (LLLP) is a relatively new modification of the limited partnership, a form of business entity recognized under US commercial law. ... A Series LLC is a special form of a Limited liability company that provides extra protection for personal assets comprised of multiple business entities. ... A Delaware corporation is a corporation chartered in the U.S. state of Delaware. ... It has been suggested that this article or section be merged into Nevada. ... It has been suggested that this article or section be merged into Limited liability company. ... A limited company by shares (limited or Ltd. ... In British or Irish company law, a Limited Company is a person on its own right. ... The initials PLC after a UK or Irish company name indicate that it is a public limited company, a type of limited company whose shares may be offered for sale to the public. ... A Proprietary limited company or abbreviated as under Australian law is a business structure that has at least one shareholder with a limited number of shares. ... A community interest company (CIC) is a new type of company introduced by the United Kingdom government in 2005. ... For other uses of civil law, see civil law. ... Aktiebolag is the Swedish term for a corporation, i. ... Aktiengesellschaft (IPA: ; abbreviated AG) is a German term that refers to a corporation that is limited by shares, i. ... An ansvarlig selskap is a Norwegian personal responsibility company model, mainly used in small-to-medium businesses, which translates directly into Responsible Company. This reflects that the participants - or owners - are personally responsible for any outstanding debts the company would aquire. ... An Aktieselskab (abbreviated A/S) is the Danish name for a stock-based corporation. ... An aksjeselskap is the Norwegian term for a stock-based corporation. ... Business corporation ) is a type of corporation ) defined under Japanese law. ... The term Naamloze Vennootschap (usually abbreviated NV) is the Dutch terminology for a public limited liability company. ... Osakeyhtiö, directly translated as share corporation, is the Finnish equivalent of Limited company (Ltd or LLC) or Gesellschaft mit beschränkter Haftung (GmbH). ... S.A. is the abbreviation of Société Anonyme in French, Spółka Akcyjna in Polish, Sociedad Anónima in Spanish, Sociedade Anónima in Portuguese, or Naamloze Venootschap (N.V.) in Dutch, generally designating corporations in various countries. ... Gesellschaft mit beschränkter Haftung (GmbH or GesmbH) is a type of legal entity created in Germany in 1892. ... The Council Regulation on the Statute for a European Company of the European Union (adopted October 8, 2001; OJ L 294, 10 November 2001, pp. ... Limited liability (LL) is liability that is limited to a partner or investors investment. ... Ultra vires is a Latin phrase that literally means beyond the power. ... The business judgment rule is a case law-derived concept in Corporations law whereby a court will refuse to review the actions of a corporations board of directors in managing the corporation unless there is some allegation of conduct that (1) violates (a) the directors duty of care, (b... The internal affairs doctrine is a choice of law rule in corporations law. ... De facto corporation and corporation by estoppel are both terms that are used by courts to describe circumstances in which is a business organization that has failed to become a de jure corporation (a corporation by law) will nonetheless be treated as a corporation, thereby shielding shareholders from liability. ... The corporate law concept piercing (Lifting) the corporate veil describes a legal decision where an officer, director, or shareholder of a corporation is held liable for the debts of the corporation despite the general principle that those persons are immune from suits in contract or tort that otherwise would only... The Rochdale Principles are a set of ideals for the operation of cooperatives. ... A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. ... Civil procedure is the body of law that sets out the process that courts will follow when hearing cases of a civil nature (a civil action, as opposed to a criminal action). ... For other uses, see Corporation (disambiguation). ... The term stakeholder has two distinct uses in the English language: The traditional usage, in law and notably gambling, a third party who temporarily holds money or property while its owner is still being determined. ... A shareholder or stockholder is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. ... For other uses, see Management (disambiguation). ... Chairman of the Board redirects here. ...


Corporate governance is a multi-faceted subject. An important theme of corporate governance deals with issues of accountability and fiduciary duty, essentially advocating the implementation of policies and mechanisms to ensure good behaviour and protect shareholders. Another key focus is the economic efficiency view, through which the corporate governance system should aim to optimize economic results, with a strong emphasis on shareholders welfare. There are yet other aspects to the corporate governance subject, such as the stakeholder view, which calls for more attention and accountability to players other than the shareholders (e.g.: the employees or the environment). Accountability is a concept in ethics with several meanings. ... A fiduciary is a person who occupies a position of trust in relation to someone else such that he is required to act for the latters benefit within the scope of that relationship. ... The Stakeholder View of Strategy is an instrumental theory of the firm, integrating both, the resource-based view as well as the market-based view, and adding a socio-political level. ...


Recently there has been considerable interest in the corporate governance practices of modern corporations, particularly since the high-profile collapses of a number of large U.S. firms such as Enron Corporation and Worldcom. Enron Corporation was an energy company based in Houston, Texas. ... For a time, WorldCom (WCOM) was the United States second largest long distance phone company (AT&T was the largest). ...


Board members and those with a responsibility for corporate governance are increasingly using the services of external providers to conduct anti-corruption auditing, due diligence and training. Basic definition Audit is the examination of records and reports of a company, in order to check that what is provided is relevant and accurate. ... Due diligence is a term used for a number of concepts involving either the performance of an investigation of a business or person, or the performance of an act with a certain standard of care. ...

Contents

Definition

The term corporate governance has come to mean two things.

  • the processes by which all companies are directed and controlled.
  • a field in economics, which studies the many issues arising from the separation of ownership and control.[1]

Relevant rules include applicable laws of the land as well as internal rules of a corporation. Relationships include those between all related parties, the most important of which are the owners, managers, directors of the board, regulatory authorities and to a lesser extent employees and the community at large. Systems and processes deal with matters such as delegation of authority. Management (from Old French ménagement the art of conducting, directing, from Latin manu agere to lead by the hand) characterises the process of leading and directing all or part of an organization, often a business, through the deployment and manipulation of resources (human, financial, material, intellectual or intangible). ... This article is about authority as a concept. ...


The corporate governance structure specifies the rules and procedures for making decisions on corporate affairs. It also provides the structure through which the company objectives are set, as well as the means of attaining and monitoring the performance of those objectives.


Corporate governance is used to monitor whether outcomes are in accordance with plans and to motivate the organization to be more fully informed in order to maintain or alter organizational activity. Corporate governance is the mechanism by which individuals are motivated to align their actual behaviors with the overall participants. For other uses, see Organization (disambiguation). ...


In A Board Culture of Corporate Governance business author Gabrielle O'Donovan defines corporate governance as 'an internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity and integrity. Sound corporate governance is reliant on external marketplace commitment and legislation, plus a healthy board culture which safeguards policies and processes'.


O'Donovan goes on to say that 'the perceived quality of a company's corporate governance can influence its share price as well as the cost of raising capital. Quality is determined by the financial markets, legislation and other external market forces plus the international organisational environment; how policies and processes are implemented and how people are led. External forces are, to a large extent, outside the circle of control of any board. The internal environment is quite a different matter, and offers companies the opportunity to differentiate from competitors through their board culture. To date, too much of corporate governance debate has centred on legislative policy, to deter fraudulent activities and transparency policy which misleads executives to treat the symptoms and not the cause.'[2] It is a system of structuring , operating and controlling a company with a view to achieve long term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers, and complying with the legal and regulatory requirements, apart from meeting environmental and local community needs.


History

In the 19th century, state corporation law enhanced the rights of corporate boards to govern without unanimous consent of shareholders in exchange for statutory benefits like appraisal rights, to make corporate governance more efficient. Since that time, and because most large publicly traded corporations in the US are incorporated under corporate administration friendly Delaware law, and because the US's wealth has been increasingly securitized into various corporate entities and institutions, the rights of individual owners and shareholders have become increasingly derivative and dissipated. The concerns of shareholders over administration pay and stock losses periodically has led to more frequent calls for corporate governance reforms. Alternative meaning: Nineteenth Century (periodical) (18th century — 19th century — 20th century — more centuries) As a means of recording the passage of time, the 19th century was that century which lasted from 1801-1900 in the sense of the Gregorian calendar. ...


In the 20th century in the immediate aftermath of the Wall Street Crash of 1929 legal scholars such as Adolf Augustus Berle, Edwin Dodd, and Gardiner C. Means pondered on the changing role of the modern corporation in society. Berle and Means' monograph "The Modern Corporation and Private Property" (1932, Macmillan) continues to have a profound influence on the conception of corporate governance in scholarly debates today. (19th century - 20th century - 21st century - more centuries) Decades: 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s As a means of recording the passage of time, the 20th century was that century which lasted from 1901–2000 in the sense of the Gregorian calendar (1900–1999... For the protest against the Communications Decency Act, see Black World Wide Web protest. ... Adolf Augustus Berle, Jr. ...


From the Chicago school of economics, Ronald Coase's "Nature of the Firm" (1937) introduced the notion of transaction costs into the understanding of why firms are founded and how they continue to behave. Fifty years later, Eugene Fama and Michael Jensen's "The Separation of Ownership and Control" (1983, Journal of Law and Economics) firmly established agency theory as a way of understanding corporate governance: the firm is seen as a series of contracts. Agency theory's dominance was highlighted in a 1989 article by Kathleen Eisenhardt (Academy of Management Review). Ronald Harry Coase (b. ... Eugene F. Fama. ... Michael C. Jensen joined the faculty of the Harvard Business School in 1985. ... In economics, the principal-agent problem treats the difficulties that arise under conditions of incomplete and asymmetric information when a principal hires an agent. ...


US expansion after World War II through the emergence of multinational corporations saw the establishment of the managerial class. Accordingly, the following Harvard Business School management professors published influential monographs studying their prominence: Myles Mace (entrepreneurship), Alfred D. Chandler, Jr. (business history), Jay Lorsch (organizational behavior) and Elizabeth MacIver (organizational behavior). According to Lorsch and MacIver "many large corporations have dominant control over business affairs without sufficient accountability or monitoring by their board of directors." Combatants Allied powers: China France Great Britain Soviet Union United States and others Axis powers: Germany Italy Japan and others Commanders Chiang Kai-shek Charles de Gaulle Winston Churchill Joseph Stalin Franklin Roosevelt Adolf Hitler Benito Mussolini Hideki Tōjō Casualties Military dead: 17,000,000 Civilian dead: 33,000... Harvard Business School, officially named the Harvard Business School: George F. Baker Foundation, and also known as HBS, is one of the graduate schools of Harvard University. ... For other uses, see Management (disambiguation). ... Alfred DuPont Chandler, Jr. ...


Current preoccupation with corporate governance can be pinpointed at two events: The East Asian Financial Crisis of 1997 saw the economies of Thailand, Indonesia, South Korea, Malaysia and The Philippines severely affected by the exit of foreign capital after property assets collapsed. The lack of corporate governance mechanisms in these countries highlighted the weaknesses of the institutions in their economies. The second event was the US corporate crises of which saw the collapse of two big corporations: Enron and WorldCom, and the ensuing scandals and collapses in other organizations such as Arthur Andersen, Global Crossing and Tyco. The East Asian financial crisis was a period of economic unrest that started in July 1997 in Thailand and affected currencies, stock markets, and other asset prices in several Asian countries, many considered East Asian Tigers. ... Wikipedia does not have an article with this exact name. ... Enron Creditors Recovery Corporation (formerly Enron Corporation) (former NYSE ticker symbol: ENE) was an American energy company based in Houston, Texas. ... For a time, WorldCom (WCOM) was the United States second largest long distance phone company (AT&T was the largest). ... For the U.S. Supreme Court case commonly known as Arthur Andersen, see Arthur Andersen LLP v. ... Global Crossing Ltd. ... Tyco has been used as the name for a number of distinct companies: Tyco International is a Bermuda-based conglomerate. ...


Role of Institutional Investors

Many years ago, worldwide, buyers and sellers of corporation stocks were individual investors, such as wealthy businessmen or families, who often had a vested, personal and emotional interest in the corporations whose shares they owned. Over time, markets have become largely institutionalized: buyers and sellers are largely institutions (e.g., pension funds, insurance companies, mutual funds, hedge funds, investor groups, and banks). A pension (also known as superannuation) is a retirement plan intended to provide a person with a secure income for life. ... Wikipedia does not yet have an article with this exact name. ... This article deals with U.S. mutual funds. ... The term hedge fund dates back to the first such fund founded by Alfred Winslow Jones in 1949. ... For other uses, see Bank (disambiguation). ...


The rise of the institutional investor has brought with it some increase of professional diligence which has tended to improve regulation of the stock market (but not necessarily in the interest of the small investor or even of the naïve institutions, of which there are many). Note that this process occurred simultaneously with the direct growth of individuals investing indirectly in the market (for example individuals have twice as much money in mutual funds as they do in bank accounts). However this growth occurred primarily by way of individuals turning over their funds to 'professionals' to manage, such as in mutual funds. In this way, the majority of investment now is described as "institutional investment" even though the vast majority of the funds are for the benefit of individual investors. A stock market is a market for the trading of company stock, and derivatives of same; both of these are securities listed on a stock exchange as well as those only traded privately. ...


Program trading, the hallmark of institutional trading, is averaging over 60% a day in 2007.[citation needed] Program trading is casually defined as the use of computers in stock markets to engage in arbitrage and portfolio insurance strategies. ...


Unfortunately, there has been a concurrent lapse in the oversight of large corporations, which are now almost all owned by large institutions. The Board of Directors of large corporations used to be chosen by the principal shareholders, who usually had an emotional as well as monetary investment in the company (think Ford), and the Board diligently kept an eye on the company and its principal executives (they usually hired and fired the President, or Chief executive officer— CEO). Chairman of the Board redirects here. ... President is a title held by many leaders of organizations, companies, trade unions, universities, and countries. ... “Chief executive” redirects here. ...


Nowadays, if the owning institutions don't like what the President/CEO is doing and they feel that firing them will likely be costly (think "golden handshake") and/or time consuming, they will simply sell out their interest. The Board is now mostly chosen by the President/CEO, and may be made up primarily of their friends and associates, such as officers of the corporation or business colleagues. Since the (institutional) shareholders rarely object, the President/CEO generally takes the Chair of the Board position for his/herself (which makes it much more difficult for the institutional owners to "fire" him/her). Occasionally, but rarely, institutional investors support shareholder resolutions on such matters as executive pay and anti-takeover measures. A golden handshake or golden parachute is a clause in an executive employment contract that provides the executive with a significant severance package in the case that the executive loses their job through firing, restructuring, or even scheduled retirement. ... Shareholder resolutions are proposals submitted by stockholders for a vote at the companys annual meeting. ...


Finally, the largest pools of invested money (such as the mutual fund 'Vanguard 500', or the largest investment management firm for corporations, State Street Corp.) are designed simply to invest in a very large number of different companies with sufficient liquidity, based on the idea that this strategy will largely eliminate individual company financial or other risk and, therefore, these investors have even less interest in a particular company's governance. “STT” redirects here. ... Market liquidity is a business or economics term that refers to the ability to quickly buy or sell a particular item without causing a significant movement in the price. ... In essence financial risk is any risk associated with money. ...


Since the marked rise in the use of Internet transactions from the 1990s, both individual and professional stock investors around the world have emerged as a potential new kind of major (short term) force in the direct or indirect ownership of corporations and in the markets: the casual participant. Even as the purchase of individual shares in any one corporation by individual investors diminishes, the sale of derivatives (e.g., exchange-traded funds (ETFs), Stock market index options [1], etc.) has soared. So, the interests of most investors are now increasingly rarely tied to the fortunes of individual corporations. A database transaction is a unit of interaction with a database management system or similar system that is treated in a coherent and reliable way independent of other transactions. ... For the band, see 1990s (band). ... A Stock Trader or Stock Investor is a securities professional or firm, who buys and sells securities, such as stocks and bonds. ... Derivatives traders at the Chicago Board of Trade. ... Exchange-traded funds (or ETFs) are open-ended investment companies that can be traded at any time throughout the course of the day. ... A comparison of three major stock indices: the NASDAQ Composite, Dow Jones Industrial Average, and S&P 500. ... Main article: Option A stock option is a specific type of option that uses the stock itself as an underlying instrument to determine the options pay-off (and therefore its value). ...


But, the ownership of stocks in markets around the world varies; for example, the majority of the shares in the Japanese market are held by financial companies and industrial corporations (there is a large and deliberate amount of cross-holding among Japanese keiretsu corporations and within S. Korean chaebol 'groups') [2], whereas stock in the USA or the UK and Europe are much more broadly owned, often still by large individual investors. A keiretsu lit. ... Chaebol (alternatively Jaebol) refers to a South Korean form of business conglomerate. ...


In the latter half of the 1990s, during the Asian financial crisis, a lot of the attention fell upon the corporate governance systems of the developing world, which tend to be heavily into cronyism and nepotism. The Asian financial crisis was a financial crisis that started in July 1997 in Thailand and affected currencies, stock markets, and other asset prices in several Asian countries, many considered East Asian Tigers. ... Manifestations Slavery Racial profiling Lynching Hate speech Hate crime Genocide (examples) Ethnocide Ethnic cleansing Pogrom Race war Religious persecution Gay bashing Blood libel Paternalism Police brutality Movements Policies Discriminatory Race / Religion / Sex segregation Apartheid Redlining Internment Anti-discriminatory Emancipation Civil rights Desegregation Integration Equal opportunity Counter-discriminatory Affirmative action Racial... Look up nepotism in Wiktionary, the free dictionary. ...


In the first half of the 1990s, the issue of corporate governance in the U.S. received considerable press attention due to the wave of CEO dismissals (e.g.: IBM, Kodak, Honeywell) by their boards. CALPERS led a wave of institutional shareholder activism (something only very rarely seen before), as a way of ensuring that corporate value would not be destroyed by the now traditionally cozy relationships between the CEO and the board of directors (e.g., by the unrestrained issuance of stock options, not infrequently back dated). For other uses, see IBM (disambiguation) and Big Blue. ... Eastman Kodak Company (NYSE: EK) is a large multinational public company producing photographic equipment. ... Honeywell Heating Specialties Company Stock Certificate dated 1924 signed by Mark C. Honeywell - courtesy of Scripophily. ... The California Public Employees Retirement System (CalPERS) provides pension fund, healthcare and other retirement services for 1. ... Options backdating is the process of granting an employee stock option that is dated prior to the date that the company granted that option. ...


In the early 2000s, the massive bankruptcies (and criminal malfeasance) of Enron and Worldcom, as well as lesser corporate debacles, such as Adelphia Communications, AOL, Arthur Andersen, Global Crossing, Tyco, and, more recently, Fannie Mae and Freddie Mac, led to increased shareholder and governmental interest in corporate governance. This culminated in the passage of the Sarbanes-Oxley Act of 2002.[3] But, since then, the stock market has greatly recovered, and shareholder zeal has waned accordingly. Enron Creditors Recovery Corporation (formerly Enron Corporation) (former NYSE ticker symbol: ENE) was an American energy company based in Houston, Texas. ... For a time, WorldCom (WCOM) was the United States second largest long distance phone company (AT&T was the largest). ... For other uses, see AOL (disambiguation). ... For the U.S. Supreme Court case commonly known as Arthur Andersen, see Arthur Andersen LLP v. ... Global Crossing Ltd. ... Tyco International Ltd. ... The United States Federal Government created the Federal National Mortgage Association (FNMA) (NYSE: FNM), commonly known as Fannie Mae, in 1938 to establish a secondary market for mortgages insured by the Federal Housing Administration (FHA). ... The Federal Home Loan Mortgage Corporation (Freddie Mac) (NYSE: FRE) is a stockholder-owned, publicly-traded company chartered by the United States federal government in 1970 to purchase mortgages and related securities, and then issues securities and bonds in financial markets backed by those mortgages in secondary markets. ... Before the signing ceremony of the Sarbanes-Oxley Act, President George Bush meets with Senator Paul Sarbanes, Secretary of Labor Elaine Chao and other dignitaries in the Blue Room at the White House on July 30, 2002. ...


Parties to corporate governance

Parties involved in corporate governance include the regulatory body (e.g. the Chief Executive Officer, the board of directors, management and shareholders). Other stakeholders who take part include suppliers, employees, creditors, customers and the community at large. “Chief executive” redirects here. ... Chairman of the Board redirects here. ... For other uses, see Management (disambiguation). ... A shareholder or stockholder is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. ...


In corporations, the shareholder delegates decision rights to the manager to act in the principal's best interests. This separation of ownership from control implies a loss of effective control by shareholders over managerial decisions. Partly as a result of this separation between the two parties, a system of corporate governance controls is implemented to assist in aligning the incentives of managers with those of shareholders. With the significant increase in equity holdings of investors, there has been an opportunity for a reversal of the separation of ownership and control problems because ownership is not so diffuse.


A board of directors often plays a key role in corporate governance. It is their responsibility to endorse the organisation's strategy, develop directional policy, appoint, supervise and remunerate senior executives and to ensure accountability of the organisation to its owners and authorities.


The Company Secretary, known as a Corporate Secretary in the US and often referred to as a Chartered Secretary if qualified by the Institute of Chartered Secretaries and Administrators (ICSA), is a high ranking professional who is trained to uphold the highest standards of corporate governance, effective operations, compliance and administration. A Company Secretary is a senior position in a private company or public organisation. ... History The Institute of Chartered Secretaries and Administrators (ICSA) was founded in 1891 and incorporated by Royal Charter in 1902. ...


All parties to corporate governance have an interest, whether direct or indirect, in the effective performance of the organisation. Directors, workers and management receive salaries, benefits and reputation, while shareholders receive capital return. Customers receive goods and services; suppliers receive compensation for their goods or services. In return these individuals provide value in the form of natural, human, social and other forms of capital.


A key factor in an individual's decision to participate in an organisation e.g. through providing financial capital and trust that they will receive a fair share of the organisational returns. If some parties are receiving more than their fair return then participants may choose to not continue participating leading to organizational collapse.


Principles

Key elements of good corporate governance principles include honesty, trust and integrity, openness, performance orientation, responsibility and accountability, mutual respect, and commitment to the organization.


Of importance is how directors and management develop a model of governance that aligns the values of the corporate participants and then evaluate this model periodically for its effectiveness. In particular, senior executives should conduct themselves honestly and ethically, especially concerning actual or apparent conflicts of interest, and disclosure in financial reports. A conflict of interest is a situation in which someone in a position of trust, such as a lawyer, a politician, or an executive or director of a corporation, has competing professional or personal interests. ...


Commonly accepted principles of corporate governance include:

  • Rights and equitable treatment of shareholders: Organizations should respect the rights of shareholders and help shareholders to exercise those rights. They can help shareholders exercise their rights by effectively communicating information that is understandable and accessible and encouraging shareholders to participate in general meetings.
  • Interests of other stakeholders: Organizations should recognize that they have legal and other obligations to all legitimate stakeholders.
  • Role and responsibilities of the board: The board needs a range of skills and understanding to be able to deal with various business issues and have the ability to review and challenge management performance. It needs to be of sufficient size and have an appropriate level of commitment to fulfill its responsibilities and duties. There are issues about the appropriate mix of executive and non-executive directors. The key roles of chairperson and CEO should not be held by the same person.
  • Integrity and ethical behaviour: Organizations should develop a code of conduct for their directors and executives that promotes ethical and responsible decision making. It is important to understand, though, that systemic reliance on integrity and ethics is bound to eventual failure. Because of this, many organizations establish Compliance and Ethics Programs to minimize the risk that the firm steps outside of ethical and legal boundaries.
  • Disclosure and transparency: Organizations should clarify and make publicly known the roles and responsibilities of board and management to provide shareholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company's financial reporting. Disclosure of material matters concerning the organization should be timely and balanced to ensure that all investors have access to clear, factual information.

Issues involving corporate governance principles include: A chairperson is the political correct term for the presiding officer of a meeting, organization, committee, or other deliberative body. ... Overview Successful organizations have long recognized legal and ethical conduct is synonymous with good business. ...

  • oversight of the preparation of the entity's financial statements
  • internal controls and the independence of the entity's auditors
  • review of the compensation arrangements for the chief executive officer and other senior executives
  • the way in which individuals are nominated for positions on the board
  • the resources made available to directors in carrying out their duties
  • oversight and management of risk
  • dividend policy

It has been suggested that ex-dividend date be merged into this article or section. ...

Mechanisms and controls

Corporate governance mechanisms and controls are designed to reduce the inefficiencies that arise from moral hazard and adverse selection. For example, to monitor managers' behaviour, an independent third party (the auditor) attests the accuracy of information provided by management to investors. An ideal control system should regulate both motivation and ability. Moral hazard refers to the prospect that a party insulated from risk (such as through insurance) will not fully account for the negative consequences of the risk when deciding to act. ... Adverse selection or anti-selection is a term used in economics and insurance. ... Audit can refer to: Telecommunication audit Financial audit Performance audit Completion of a course of study for which no assessment is completed or grade awarded; especially audit is awarded to those who have elected not to receive a letter grade for a course in which letter grades typically awarded. ...


Internal corporate governance controls

Internal corporate governance controls monitor activities and then take corrective action to accomplish organisational goals. Examples include:

  • Monitoring by the board of directors: The board of directors, with its legal authority to hire, fire and compensate top management, safeguards invested capital. Regular board meetings allow potential problems to be identified, discussed and avoided. Whilst non-executive directors are thought to be more independent, they may not always result in more effective corporate governance and may not increase performance.[3] Different board structures are optimal for different firms. Moreover, the ability of the board to monitor the firm's executives is a function of its access to information. Executive directors possess superior knowledge of the decision-making process and therefore evaluate top management on the basis of the quality of its decisions that lead to financial performance outcomes, ex ante. It could be argued, therefore, that executive directors look beyond the financial criteria.
  • Remuneration: Performance-based remuneration is designed to relate some proportion of salary to individual performance. It may be in the form of cash or non-cash payments such as shares and share options, superannuation or other benefits. Such incentive schemes, however, are reactive in the sense that they provide no mechanism for preventing mistakes or opportunistic behaviour, and can elicit myopic behaviour.

Look up share on Wiktionary, the free dictionary. ... A stock option is a specific type of option with a stock as the underlying instrument (the security that the value of the option is based on). ... A pension (also known as superannuation) is a retirement plan intended to provide a person with a secure income for life. ...

External corporate governance controls

External corporate governance controls encompass the controls external stakeholders exercise over the organisation. Examples include:

  • debt covenants
  • government regulations
  • media pressure
  • takeovers
  • competition
  • managerial labour market
  • telephone tapping

Systemic problems of corporate governance

  • Supply of accounting information: Financial accounts form a crucial link in enabling providers of finance to monitor directors. Imperfections in the financial reporting process will cause imperfections in the effectiveness of corporate governance. This should, ideally, be corrected by the working of the external auditing process.
  • Demand for information: A barrier to shareholders using good information is the cost of processing it, especially to a small shareholder. The traditional answer to this problem is the efficient market hypothesis (in finance, the efficient market hypothesis (EMH) asserts that financial markets are efficient), which suggests that the shareholder will free ride on the judgements of larger professional investors.
  • Monitoring costs: In order to influence the directors, the shareholders must combine with others to form a significant voting group which can pose a real threat of carrying resolutions or appointing directors at a general meeting.

Role of the accountant

Financial reporting is a crucial element necessary for the corporate governance system to function effectively. Accountants and auditors are the primary providers of information to capital market participants. The directors of the company should be entitled to expect that management prepare the financial information in compliance with statutory and ethical obligations, and rely on auditors' competence. Accountant, or Qualified Accountant, or Professional Accountant, is a certified accountancy and financial expert in the jurisdiction of many countries. ... Audit can refer to: Telecommunication audit Financial audit Performance audit Completion of a course of study for which no assessment is completed or grade awarded; especially audit is awarded to those who have elected not to receive a letter grade for a course in which letter grades typically awarded. ...


Current accounting practice allows a degree of choice of method in determining the method of measurement, criteria for recognition, and even the definition of the accounting entity. The exercise of this choice to improve apparent performance (popularly known as creative accounting) imposes extra information costs on users. In the extreme, it can involve non-disclosure of information. Creative accounting and earnings management are euphemisms referring to accounting practices that may or may not follow the letter of the rules of standard accounting practices but certainly deviate from the spirit of those rules. ...


One area of concern is whether the accounting firm acts as both the independent auditor and management consultant to the firm they are auditing. This may result in a conflict of interest which places the integrity of financial reports in doubt due to client pressure to appease management. The power of the corporate client to initiate and terminate management consulting services and, more fundamentally, to select and dismiss accounting firms contradicts the concept of an independent auditor. Changes enacted in the United States in the form of the Sarbanes-Oxley Act (in response to the Enron situation as noted below) prohibit accounting firms from providing both auditing and management consulting services.


The Enron collapse is an example of misleading financial reporting. Enron concealed huge losses by creating illusions that a third party was contractually obliged to pay the amount of any losses. However, the third party was an entity in which Enron had a substantial economic stake. In discussions of accounting practices with Arthur Andersen, the partner in charge of auditing, views inevitably led to the client prevailing. For the U.S. Supreme Court case commonly known as Arthur Andersen, see Arthur Andersen LLP v. ...


However, good financial reporting is not a sufficient condition for the effectiveness of corporate governance if users don't process it, or if the informed user is unable to exercise a monitoring role due to high costs (see Systemic problems of corporate governance above).


Regulation

Main article: Regulation

Self-regulation

Rules versus principles

Rules are typically thought to be simpler to follow than principles, demarcating a clear line between acceptable and unacceptable behaviour. Rules also reduce discretion on the part of individual managers or auditors.


In practice rules can be more complex than principles. They may be ill-equipped to deal with new types of transactions not covered by the code. Moreover, even if clear rules are followed, one can still find a way to circumvent their underlying purpose - this is harder to achieve if one is bound by a broader principle.


Principles on the other hand is a form of self regulation. It allows the sector to determine what standards are acceptable or unacceptable. It also pre-empts over zealous legislations that might not be practical.


Enforcement

Enforcement can affect the overall credibility of a regulatory system. They both deter bad actors and level the competitive playing field. Nevertheless, greater enforcement is not always better, for taken too far it can dampen valuable risk-taking. In practice, however, this is largely a theoretical, as opposed to a real, risk.


Corporate governance models around the world

Anglo-American Model

There are many different models of corporate governance around the world. These differ according to the variety of capitalism in which they are embedded. The liberal model that is common in Anglo-American countries tends to give priority to the interests of shareholders. The coordinated model that one finds in Continental Europe and Japan also recognizes the interests of workers, managers, suppliers, customers, and the community. Both models have distinct competitive advantages, but in different ways. The liberal model of corporate governance encourages radical innovation and cost competition, whereas the coordinated model of corporate governance facilitates incremental innovation and quality competition. However, there are important differences between the U.S. recent approach to governance issues and what has happened in the U.K..


In the United States, a corporation is governed by a board of directors, which has the power to choose an executive officer, usually known as the chief executive officer. The CEO has broad power to manage the corporation on a daily basis, but needs to get board approval for certain major actions, such as hiring his/her immediate subordinates, raising money, acquiring another company, major capital expansions, or other expensive projects. Other duties of the board may include policy setting, decision making, monitoring management's performance, or corporate control. Chairman of the Board redirects here. ... Chief Executive Officer (CEO) is the job of having the ultimate executive responsibility or authority within an organization or corporation. ...


The board of directors is nominally selected by and responsible to the shareholders, but the bylaws of many companies make it difficult for all but the largest shareholders to have any influence over the makeup of the board; normally, individual shareholders are not offered a choice of board nominees among which to choose, but are merely asked to rubberstamp the nominees of the sitting board. Perverse incentives have pervaded many corporate boards in the developed world, with board members beholden to the chief executive whose actions they are intended to oversee. Frequently, members of the boards of directors are CEOs of other corporations, which some[4] see as a conflict of interest. A shareholder or stockholder is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. ... A bylaw (sometimes also spelled by-law or byelaw) was originally the Viking town law in the Danelaw. ...


The U.K. has pioneered a flexible model of regulation of corporate governance, known as the "comply or explain" code of governance. This is a principle based code that lists a dozen of recommended practices, such as the separation of CEO and Chairman of the Board, the introduction of a time limit for CEOs' contracts, the introduction of a minimum number of non-executives Directors, of independent directors, the designation of a senior non executive director, the formation and composition of remuneration, audit and nomination committees. Publicly listed companies in the U.K. have to either apply those principles or, if they choose not to, to explain in a designated part of their annual reports why they decided not to do so. The monitoring of those explanations is left to shareholders themselves. The tenet of the Code is that one size does not fit all in matters of corporate governance and that instead of a statury regime like the Sarbanes-Oxley Act in the U.S., it is best to leave some flexibility to companies so that they can make choices most adapted to their circumstances. If they have good reasons to deviate from the sound rule, they should be able to convincingly explain those to their shareholders.


The code has been in place since 1993 and has had drastic effects on the way firms are governed in the U.K. A study by Arcot, Bruno and Faure-Grimaud from the Financial Markets Group at the London School of Economics shows that in 1993, about 10% of the UK companies member of the FTSE 350 were compliants on all dimensions while they were more than 60% in 2003. The same success was not achieved when looking at the explanation part for non compliant companies. Many deviations are simply not explained and a large majority of explanations fail to identify specific circumstances justifying those deviations. Still, the overall view is that the U.K.'s system works fairly well and in fact is often branded as a benchmark, followed by several countries.


Non Anglo-American Model

In East Asian countries, family-owned companies dominate. A study by Claessens, Djankov and Lang (2000) investigated the top 15 families in East Asian countries and found that they dominated listed corporate assets. In countries such as Pakistan, Indonesia and the Philippines, the top 15 families controlled over 50% of publicly owned corporations through a system of family cross-holdings, thus dominating the capital markets. Family-owned companies also dominate the Latin model of corporate governance, that is companies in Mexico, Italy, Spain, France (to a certain extent), Brazil, Argentina, and other countries in South America.


Europe and Asia exemplify the insider system: Shareholder and stakeholder • a small number of listed companies, • an illiquid capital market where ownership and control are not frequently traded • high concentration of shareholding in the hands of corporations, institutions, families or government. • the insider model uses a system of interlocking networks and committees.


Codes and guidelines

Corporate governance principles and codes have been developed in different countries and issued from stock exchanges, corporations, institutional investors, or associations (institutes) of directors and managers with the support of governments and international organizations. As a rule, compliance with these governance recommendations is not mandated by law, although the codes linked to stock exchange listing requirements may have a coercive effect. A stock exchange is a corporation or mutual organization which provides the facilities for stock brokers to trade company stocks and other securities. ...


For example, companies quoted on the London and Toronto Stock Exchanges formally need not follow the recommendations of their respective national codes. However, they must disclose whether they follow the recommendations in those documents and, where not, they should provide explanations concerning divergent practices. Such disclosure requirements exert a significant pressure on listed companies for compliance.


In the United States, companies are primarily regulated by the state in which they incorporate though they are also regulated by the federal government and, if they are public, by their stock exchange. The highest number of companies are incorporated in Delaware, including more than half of the Fortune 500. This is due to Delaware's generally business-friendly corporate legal environment and the existence of a state court dedicated solely to business issues (Delaware Court of Chancery).


Most states' corporate law generally follow the American Bar Association's Model Business Corporation Act. While Delaware does not follow the Act, it still considers its provisions and several prominent Delaware justices, including former Delaware Supreme Court Chief Justice E. Norman Veasey, participate on ABA committees.


One issue that has been raised since the Disney decision[5] in 2005 is the degree to which companies manage their governance responsibilities; in other words, do they merely try to supersede the legal threshold, or should they create governance guidelines that ascend to the level of best practice. For example, the guidelines issued by associations of directors (see Section 3 above), corporate managers and individual companies tend to be wholly voluntary. For example, The GM Board Guidelines reflect the company’s efforts to improve its own governance capacity. Such documents, however, may have a wider multiplying effect prompting other companies to adopt similar documents and standards of best practice.


One of the most influential guidelines has been the 1999 OECD Principles of Corporate Governance. This was revised in 2004. The OECD remains a proponent of corporate governance principles throughout the world. The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ...


The World Business Council for Sustainable Development WBCSD has also done substantial work on corporate governance, particularly on accountability and reporting, and in 2004 created an Issue Management Tool: Strategic challenges for business in the use of corporate responsibility codes, standards, and frameworks.This document aims to provide general information, a "snap-shot" of the landscape and a perspective from a think-tank/professional association on a few key codes, standards and frameworks relevant to the sustainability agenda. The World Business Council for Sustainable Development (WBCSD) is a coalition of 175 international companies united by a shared commitment to sustainable development via the three pillars of economic growth, ecological balance and social progress. ...


Corporate governance and firm performance

In its 'Global Investor Opinion Survey' of over 200 institutional investors first undertaken in 2000 and updated in 2002, McKinsey found that 80% of the respondents would pay a premium for well-governed companies. They defined a well-governed company as one that had mostly out-side directors, who had no management ties, undertook formal evaluation of its directors, and was responsive to investors' requests for information on governance issues. The size of the premium varied by market, from 11% for Canadian companies to around 40% for companies where the regulatory backdrop was least certain (those in Morocco, Egypt and Russia). Year 2000 (MM) was a leap year starting on Saturday (link will display full 2000 Gregorian calendar). ... Also see: 2002 (number). ... McKinsey & Company is a privately owned management consulting firm. ...


Other studies have linked broad perceptions of the quality of companies to superior share price performance. In a study of five year cumulative returns of Fortune Magazine's survey of 'most admired firms', Antunovich et al found that those "most admired" had an average return of 125%, whilst the 'least admired' firms returned 80%. In a separate study Business Week enlisted institutional investors and 'experts' to assist in differentiating between boards with good and bad governance and found that companies with the highest rankings had the highest financial returns. Categories: Magazines stubs | Time Warner subsidiaries | Business magazines ... BusinessWeek is a business magazine published by McGraw-Hill. ...


On the other hand, research into the relationship between specific corporate governance controls and firm performance has been mixed and often weak. The following examples are illustrative.


Board composition

Some researchers have found support for the relationship between frequency of meetings and profitability. Others have found a negative relationship between the proportion of external directors and firm performance, while others found no relationship between external board membership and performance. In a recent paper Bagahat and Black found that companies with more independent boards do not perform better than other companies. It is unlikely that board composition has a direct impact on firm performance.


Remuneration/Compensation

The results of previous research on the relationship between firm performance and executive compensation have failed to find consistent and significant relationships between executives' remuneration and firm performance. Low average levels of pay-performance alignment do not necessarily imply that this form of governance control is inefficient. Not all firms experience the same levels of agency conflict, and external and internal monitoring devices may be more effective for some than for others.


Some researchers have found that the largest CEO performance incentives came from ownership of the firm's shares, while other researchers found that the relationship between share ownership and firm performance was dependent on the level of ownership. The results suggest that increases in ownership above 20% cause management to become more entrenched, and less interested in the welfare of their shareholders.


Some argue that firm performance is positively associated with share option plans and that these plans direct managers' energies and extend their decision horizons toward the long-term, rather than the short-term, performance of the company. However, that point of view came under substantial criticism circa in the wake of various security scandals including mutual fund timing episodes and, in particular, the backdating of option grants as documented by University of Iowa academic Erik Lie and reported by James Blander and Charles Forelle of the Wall Street Journal. This article is about options traded in financial markets. ...


Even before the negative influence on public opinion caused by the 2006 backdating scandal, use of options faced various criticisms. A particularly forceful and long running argument concerned the interaction of executive options with corporate stock repurchase programs. Numerous authorities (including U.S. Federal Reserve Board economist Weisbenner) determined options may be employed in concert with stock buybacks in a manner contrary to shareholder interests. These authors argued that, in part, corporate stock buybacks for U.S. Standard & Poors 500 companies surged to a $500 billion annual rate in late 2006 because of the impact of options. A compendium of academic works on the option/buyback issue is included in the study Scandalby author M. Gumport issued in 2006.


A combination of accounting changes and governance issues led options to become a less popular means of remuneration as 2006 progressed, and various alternative implementations of buybacks surfaced to challenge the dominance of "open market" cash buybacks as the preferred means of implementing a share repurchase plan.


Corporate governance and developing countries

At the same time that developing countries are undergoing a process of economic growth and transformation, they are also experiencing a revolution in the business and political relationships that characterize their private and public sectors. Establishing good corporate governance practices is essential to sustaining long-term development and growth as these countries move from closed, market-unfriendly, undemocratic systems towards open, market-friendly, democratic systems. Good corporate governance systems will allow organizations to realize their maximum productivity and efficiency, minimize corruption and abuse of power, and provide a system of managerial accountability.[6] These goals are equally important for both private corporations and government bodies.


Because of the implicit relationship between private interests and the larger government, good corporate governance practices are essential to establishing good governance at the national level in developing countries.[7] A number of ties the keep the public and private sectors closely linked. On one hand, judiciary and regulatory bodies as well as legislatures play a role in corporate management and oversight. At the same time cartels and large corporate interests use their size to exert not only economic, but also political power. These two sectors are so intertwined that, according to the report Corporate Governance in Development: The Experiences of Brazil, Chile, India, and South Africa, a country cannot significantly change one without simultaneously instituting changes in the other.[8]


According to Nicolas Meisel, there are four priorities which developing countries should concentrate on while experimenting with new forms of corporate and public governance. The first is to focus on improving the quality of information and increasing the speed at which it is created and distributed to the public. Good communication is important to the functioning of any organization. The second is to allow individual actors more autonomy while at the same time maintaining or increasing accountability. Thirdly, if a hierarchical organization used to orient private activities toward the general interest, new countervailing powers should be encouraged to fill this role. Finally, the part the state plays and how government officials are selected must be considered if a developing economy is to achieve sustainable growth. This may involve making it easier for newcomers with new ideas incumbents who may hold to older, possibly outdated, models.[9]

See also

An agency cost is the cost incurred by an organization that are associated with problems such as divergent management-shareholder objectives and information asymmetry. ... In economics, the principal-agent problem treats the difficulties that arise under conditions of incomplete and asymmetric information when a principal hires an agent. ... -1... Business ethics is a form of the art of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ... The neutrality of this article is disputed. ... Corporate benefit (sometimes referred to as commercial benefit) is the requirement under some legal systems that the directors of a company must exercise the powers[1] of the company for the commercial benefit of the company and its members. ... In criminology, corporate crime refers to crimes committed either by a corporation (i. ... Overview Successful organizations have long recognized legal and ethical conduct is synonymous with good business. ... Corporate Law Economic Reform Program (Audit Reform & Corporate Disclosure) Act 2004, commonly called CLERP, is the most recent reform to the Corporations Act 2001 (Commonwealth) which governs corporations law in Australia. ... The Cadbury Report, titled Financial Aspects of Corporate Governance, sets out recommendations on the arrangement of company boards and accounting systems to mitigate European Union, the United States, the World Bank, and others, External link Financial Aspects of Corporate Governance (aka the Cadbury Report) Caution - PDF Categories: Economic Stubs ... Corporate Social Responsibility (CSR) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations. ... For other uses, see Corporation (disambiguation). ... This article or section contains information that has not been verified and thus might not be reliable. ... Institutional fund management is fund management conducted by large financial firms such as banks, insurance companies and major investment organisations (e. ... A golden parachute is a clause (or several) in an executives employment contract specifying that they will receive certain large benefits if their employment is terminated. ... King I is the abbreviated name for the King Report on Corporate Governance published 1994 in South Africa[1]. Produced by by the King Committee on Corporate Governance, that was led by former High Court judge, Mervin King, it included a Code of Corporate Practices and Conduct, the first of... King II is the abbreviated name for the King Report on Corporate Governance for South Africa published 2002 in South Africa[1]. It followed a 1994 report commonly known as King I Companies listed on South Africas JSE Securities Exchange have to comply with King II which itself requires... In economics, the legal origins theory states that many aspects of a countrys economic state of development are the result of their legal system, most of all where a particular country received its law from. ... For non-business risks, see risk or the disambiguation page risk analysis. ... Before the signing ceremony of the Sarbanes-Oxley Act, President George Bush meets with Senator Paul Sarbanes, Secretary of Labor Elaine Chao and other dignitaries in the Blue Room at the White House on July 30, 2002. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... A takeover in business refers to one company (the acquirer, or bidder) purchasing another (the target). ... Poison pill originally meant a literal poison pill (often a glass vial of cyanide salts) carried by various spies throughout history, and by Nazi leaders in WWII. Spies could take such pills when discovered, eliminating any possibility that they could be interrogated for the enemys gain. ...

References

  1. ^ For a good overview of the different theoretical perspectives on corporate governance see Chapter 15 of Dignam, A and Lowry, J (2006) Company Law, Oxford University Press ISBN-13: 978-0-19-928936-3
  2. ^ Corporate Governance International Journal, "A Board Culture of Corporate Governance, Vol 6 Issue 3 (2003)
  3. ^ Bhagat & Black, "The Uncertain Relationship Between Board Composition and Firm Performance", 54 Business Lawyer)
  4. ^ Theyrule.net
  5. ^ The Disney Decision of 2005 and the precedent it sets for corporate governance and fiduciary responsibility, Kuckreja, Akin Gump, Aug 2005
  6. ^ Business for Development: Fostering the Private Sector. OECD Development Centre. Paris: OECD Publications, 2007 (149-152).
  7. ^ Nicolas Meisel, Governance Culture and Development (Paris: OECD Publishing, 2004) SourceOECD, 27 July 2007 <http://masetto.sourceoecd.org/vl=2159879/cl=14/nw=1/rpsv/cgi-bin/fulltextew.pl?prpsv=/ij/oecdthemes/99980010/v2004n9/s1/p1l.idx> (12).
  8. ^ Corporate Governance in Development: The Experiences of Brazil, Chile, India, and South Africa. ed. Charles P. Oman. OECD Development Centre and CIPE, 2006.
  9. ^ Nicolas Meisel, Governance Culture and Development (Paris: OECD Publishing, 2004) SourceOECD, 27 July 2007 <http://masetto.sourceoecd.org/vl=2159879/cl=14/nw=1/rpsv/cgi-bin/fulltextew.pl?prpsv=/ij/oecdthemes/99980010/v2004n9/s1/p1l.idx> (120).
  • Arcot, Sridhar, Bruno, Valentina and Antoine Faure-Grimaud, "Corporate Governance in the U.K.: is the comply-or-explain working?" (December 2005). FMG CG Working Paper 001.
  • Becht, Marco, Patrick Bolton, Ailsa Röell, "Corporate Governance and Control" (October 2002; updated August 2004). ECGI - Finance Working Paper No. 02/2002.
  • Brickley, James A., William S. Klug and Jerold L. Zimmerman, Managerial Economics & Organizational Architecture, ISBN
  • Cadbury, Sir Adrian, "The Code of Best Practice", Report of the Committee on the Financial Aspects of Corporate Governance, Gee and Co Ltd, 1992. Available online from [4]
  • Cadbury, Sir Adrian, "Corporate Governance: Brussels", Instituut voor Bestuurders, Brussels, 1996.
  • Claessens, Stijn, Djankov, Simeon & Lang, Larry H.P. (2000) The Separation of Ownership and Control in East Asian Corporations, Journal of Financial Economics, 58: 81-112
  • Clarke, Thomas (ed.) (2004) "Theories of Corporate Governance: The Philosophical Foundations of Corporate Governance," London and New York: Routledge, ISBN-X
  • Clarke, Thomas (ed.) (2004) "Critical Perspectives on Business and Management: 5 Volume Series on Corporate Governance - Genesis, Anglo-American, European, Asian and Contemporary Corporate Governance" London and New York: Routledge, ISBN
  • Clarke, Thomas & dela Rama, Marie (eds.) (2006) "Corporate Governance and Globalization" London and Thousand Oaks, CA: SAGE, ISBN
  • Colley, J., Doyle, J., Logan, G., Stettinius, W., What is Corporate Governance ? (McGraw-Hill, December 2004) ISBN
  • Easterbrook, Frank H. and Daniel R. Fischel, The Economic Structure of Corporate Law, ISBN
  • Erturk, Ismail, Froud, Julie, Johal, Sukhdev and Williams, Karel (2004) Corporate Governance and Disappointment Review of International Political Economy, 11 (4): 677-713.
  • Garrett, Allison, "Themes and Variations: The Convergence of Corporate Governance Practices in Major World Markets," 32 Denv. J. Int’l L. & Pol’y).
  • Holton, Glyn A (2006). Investor Suffrage Movement, Financial Analysits Journal, 62 (6), 15–20.
  • Monks, Robert A.G. and Minow, Nell, Corporate Governance (Blackwell 2004) ISBN
  • Monks, Robert A.G. and Minow, Nell, Power and Accountability (HarperBusiness 1991), full text available online
  • New York Society of Securities Analysts, 2003, Corporate Governance Handbook,
  • OECD (1999, 2004) Principles of Corporate Governance Paris: OECD)
  • Özekmekçi, Abdullah, Mert (2004) "The Correlation between Corporate Governance and Public Relations", Istanbul Bilgi University.
  • Whittington, G. "Corporate Governance and the Regulation of Financial Reporting", Accounting and Business Research, Vol. 2, 1993, Corporate Governance Special Issue, pp. 311-319.
  • World Business Council for Sustainable Development WBCSD (2004) Issue Management Tool: Strategic challenges for business in the use of corporate responsibility codes, standards, and frameworks

Sir Adrian Cadbury (born 1929) is a member of the well-known Cadbury family. ... Sir Adrian Cadbury (born 1929) is a member of the well-known Cadbury family. ... A Professor of Management at the University of Technology, Sydney, Australia. ... A Professor of Management at the University of Technology, Sydney, Australia. ... A Professor of Management at the University of Technology, Sydney, Australia. ... Frank Hoover Easterbrook (born 1948) has been a judge on the United States Seventh Circuit Court of Appeals since 1985. ... The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ... The World Business Council for Sustainable Development (WBCSD) is a coalition of 175 international companies united by a shared commitment to sustainable development via the three pillars of economic growth, ecological balance and social progress. ...

External links

  • The Conference Board Governance Center

  Results from FactBites:
 
Corporate governance - Wikipedia, the free encyclopedia (4665 words)
Corporate governance also includes the relationships among the many players involved (the stakeholders) and the goals for which the corporation is governed.
Corporate governance is the mechanism by which individuals are motivated to align their actual behaviours with the overall participants.
Corporate governance issues are receiving greater attention in both developed and developing countries as a result of the increasing recognition that a firm’s corporate governance affects both its economic performance and its ability to access long-term, low-cost investment capital.
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