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Corporate governence an introduction Corporate governence an introduction Presentation Transcript

  • by Dr.Rajesh Patel,Director,NRV1/20/2012 9:45:36 PM 1 MBA,email1966patel@gmail.com
  • Corporate governance "deals with conflicts ofinterests between• the providers of finance and the managers;• the shareholders and the stakeholders;•different types of shareholders (mainly the largeshareholder and the minority shareholders) by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:36 PM 2 MBA,email1966patel@gmail.com
  • and the prevention or mitigation of these conflicts of interests".Ways of mitigating or preventing these conflicts of interests include the processes, customs, policies, laws, and institutions which have impact on the way a company is controlled.An important theme of corporate governance is the nature and extent of accountability of people in the business, and mechanisms that try to decrease the principal–agent problem. by Dr.Rajesh Patel,Director,NRV1/20/2012 9:45:37 PM 3 MBA,email1966patel@gmail.com
  • Corporate governance also includes the relationships amongthe many stakeholders involved and the goals for which thecorporation is governed. In contemporary businesscorporations, the main external stakeholder groups areshareholders, debtholders, trade creditors, suppliers,customers and communities affected by the corporationsactivities. Internal stakeholders are the board of directors,executives, and other employees. It guarantees that anenterprise is directed and controlled in a responsible,professional, and transparent manner with the purpose ofsafeguarding its long-term success. It is intended to increasethe confidence of shareholders and capital-market investors. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 4 MBA,email1966patel@gmail.com
  • There has been renewed interest in the corporate governancepractices of modern corporations since 2001, particularly dueto the high-profile collapses of a number of largecorporations, most of which involved accounting fraud.Corporate scandals of various forms have maintained publicand political interest in the regulation of corporategovernance. In the U.S., these include Enron Corporation andMCI Inc. (formerly WorldCom). Their demise is associatedwith the U.S. federal government passing the Sarbanes-OxleyAct in 2002, intending to restore public confidence incorporate governance. Comparable failures in Australia (HIH,One.Tel) are associated with the eventual passage of theCLERP 9 reforms. Similar corporate failures in other countriesstimulated increased regulatory interest. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 5 MBA,email1966patel@gmail.com
  • Principles ofcorporate governance by Dr.Rajesh Patel,Director,NRV1/20/2012 9:45:37 PM 6 MBA,email1966patel@gmail.com
  • Contemporary discussions of corporate governancetend to refer to principles raised in three documentsreleased since 1990: The Cadbury Report (UK, 1992),the Principles of Corporate Governance (OECD, 1998and 2004), the Sarbanes-Oxley Act of 2002 (US, 2002).The Cadbury and OECD reports present generalprincipals around which businesses are expected tooperate to assure proper governance. The Sarbanes-Oxley Act, informally referred to as Sarbox or Sox, isan attempt by the federal government in the UnitedStates to legislate several of the principlesrecommended in the Cadbury and OECD reports. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 7 MBA,email1966patel@gmail.com
  • •Rights and equitable treatment ofshareholders: Organizations should respect therights of shareholders and help shareholders toexercise those rights. They can helpshareholders exercise their rights by openly andeffectively communicating information and byencouraging shareholders to participate ingeneral meetings. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 8 MBA,email1966patel@gmail.com
  • •Interests of other stakeholders:Organizations should recognize that theyhave legal, contractual, social, and marketdriven obligations to non-shareholderstakeholders, including employees,investors, creditors, suppliers, localcommunities, customers, and policymakers. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 9 MBA,email1966patel@gmail.com
  • •Role and responsibilities of theboard: The board needs sufficientrelevant skills and understanding toreview and challenge managementperformance. It also needs adequatesize and appropriate levels ofindependence and commitment by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 10 MBA,email1966patel@gmail.com
  • •Integrity and ethical behavior: Integrityshould be a fundamental requirement inchoosing corporate officers and boardmembers. Organizations should develop acode of conduct for their directors andexecutives that promotes ethical andresponsible decision making. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 11 MBA,email1966patel@gmail.com
  • •Disclosure and transparency: Organizations shouldclarify and make publicly known the roles andresponsibilities of board and management to providestakeholders with a level of accountability. Theyshould also implement procedures to independentlyverify and safeguard the integrity of the companysfinancial reporting. Disclosure of material mattersconcerning the organization should be timely andbalanced to ensure that all investors have access toclear, factual information. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 12 MBA,email1966patel@gmail.com
  • Corporate governance models aroundthe worldThere are many different models of corporate governancearound the world. These differ according to the variety ofcapitalism in which they are embedded. The Anglo-American "model" tends to emphasize the interests ofshareholders. The coordinated or multi-stakeholder modelassociated with Continental Europe and Japan alsorecognizes the interests of workers, managers, suppliers,customers, and the community. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 13 MBA,email1966patel@gmail.com
  • Continental EuropeSome continental European countries, including Germany andthe Netherlands, require a two-tiered Board of Directors as ameans of improving corporate governance. In the two-tieredboard, the Executive Board, made up of company executives,generally runs day-to-day operations while the supervisoryboard, made up entirely of non-executive directors whorepresent shareholders and employees, hires and fires themembers of the executive board, determines theircompensation, and reviews major business decisions. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 14 MBA,email1966patel@gmail.com
  • IndiaIndias SEBI Committee on Corporate Governance definescorporate governance as the "acceptance by management ofthe inalienable rights of shareholders as the true owners ofthe corporation and of their own role as trustees on behalf ofthe shareholders. It is about commitment to values, aboutethical business conduct and about making a distinctionbetween personal & corporate funds in the management of acompany."[21] It has been suggested that the Indian approachis drawn from the Gandhian principle of trusteeship and theDirective Principles of the Indian Constitution, but thisconceptualization of corporate objectives is also prevalent inAnglo-American and most other jurisdictions. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 15 MBA,email1966patel@gmail.com
  • The United States and the UKThe so-called "Anglo-American model" (also known as "the unitary system"emphasizes a single-tiered Board of Directors composed of a mixture of executivesfrom the company and non-executive directors, all of whom are elected byshareholders. Non-executive directors are expected to outnumber executive directorsand hold key posts, including audit and compensation committees. The United Statesand the United Kingdom differ in one critical respect with regard to corporategovernance: In the United Kingdom, the CEO generally does not also serve asChairman of the Board, whereas in the US having the dual role is the norm, despitemajor misgivings regarding the impact on corporate governance. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 16 MBA,email1966patel@gmail.com
  • In the United States, corporations are directly governed bystate laws, while the exchange (offering and trading) ofsecurities in corporations (including shares) is governed byfederal legislation. Many U.S. states have adopted the ModelBusiness Corporation Act, but the dominant state law forpublicly-traded corporations is Delaware, which continues tobe the place of incorporation for the majority of publicly-traded corporations. Individual rules for corporations arebased upon the corporate charter and, less authoritatively,the corporate bylaws.Shareholders cannot initiate changes inthe corporate charter although they can initiate changes tothe corporate bylaws. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 17 MBA,email1966patel@gmail.com
  • Regulation by Dr.Rajesh Patel,Director,NRV1/20/2012 9:45:37 PM 18 MBA,email1966patel@gmail.com
  • Legal environment - GeneralCorporations are created as legal persons by the laws andregulations of a particular jurisdiction. These may vary inmany respects between countries, but a corporations legalperson status is fundamental to all jurisdictions and isconferred by statute. This allows the entity to hold property inits own right without reference to any particular real person.It also results in the perpetual existence that characterizes themodern corporation. The statutory granting of corporateexistence may arise from general purpose legislation (which isthe general case) or from a statute to create a specificcorporation, which was the only method prior to the 19thcentury. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 19 MBA,email1966patel@gmail.com
  • In addition to the statutory laws of the relevant jurisdiction, corporations aresubject to common law in some countries, and various laws and regulationsaffecting business practices. In most jurisdictions, corporations also have aconstitution that provides individual rules that govern the corporation andauthorize or constrain its decision-makers. This constitution is identified by avariety of terms; in English-speaking jurisdictions, it is usually known as theCorporate Charter or the [Memorandum and] Articles of Association. The capacityof shareholders to modify the constitution of their corporation can varysubstantially. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 20 MBA,email1966patel@gmail.com
  • Codes and guidelinesCorporate governance principles and codes have been developed indifferent countries and issued from stock exchanges, corporations,institutional investors, or associations (institutes) of directors andmanagers with the support of governments and internationalorganizations. As a rule, compliance with these governancerecommendations is not mandated by law, although the codes linked tostock exchange listing requirements may have a coercive effect. Forexample, companies quoted on the London, Toronto and AustralianStock Exchanges formally need not follow the recommendations of theirrespective codes. However, they must disclose whether they follow therecommendations in those documents and, where not, they shouldprovide explanations concerning divergent practices. Such disclosurerequirements exert a significant pressure on listed companies forcompliance. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 21 MBA,email1966patel@gmail.com
  • One of the most influential guidelines has been the 1999 OECDPrinciples of Corporate Governance. This was revised in 2004. The OECDguidelines are often referenced by countries developing local codes orguidelines. Building on the work of the OECD, other internationalorganizations, private sector associations and more than 20 nationalcorporate governance codes, the United Nations IntergovernmentalWorking Group of Experts on International Standards of Accounting andReporting (ISAR) has produced their Guidance on Good Practices inCorporate Governance Disclosure. This internationally agreed[26]benchmark consists of more than fifty distinct disclosure items acrossfive broad categories:[27]•Auditing•Board and management structure and process•Corporate responsibility and compliance•Financial transparency and information disclosure by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 22 MBA,email1966patel@gmail.com
  • The investor-led organisation International Corporate GovernanceNetwork (ICGN) was set up by individuals centered around the tenlargest pension funds in the world 1995. The aim is to promote globalcorporate governance standards. The network is led by investors thatmanage 18 trillion dollars and members are located in fifty differentcountries. ICGN has developed a suite of global guidelines ranging fromshareholder rights to business ethics. The World Business Council forSustainable Development (WBCSD) has done work on corporategovernance, particularly on accountability and reporting, and in 2004released Issue Management Tool: Strategic challenges for business inthe use of corporate responsibility codes, standards, and frameworks.This document offers general information and a perspective from abusiness association/think-tank on a few key codes, standards andframeworks relevant to the sustainability agenda. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 23 MBA,email1966patel@gmail.com
  • In 2009, the International Finance Corporation and the UN GlobalCompact released a report, Corporate Governance - the Foundationfor Corporate Citizenship and Sustainable Business, linking theenvironmental, social and governance responsibilities of a company toits financial performance and long-term sustainability.Most codes are largely voluntary. An issue raised in the U.S. since the2005 Disney decision[28] is the degree to which companies managetheir governance responsibilities; in other words, do they merely tryto supersede the legal threshold, or should they create governanceguidelines that ascend to the level of best practice. For example, theguidelines issued by associations of directors, corporate managers andindividual companies tend to be wholly voluntary but such documentsmay have a wider effect by prompting other companies to adoptsimilar practices. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 24 MBA,email1966patel@gmail.com
  • History - United StatesIn 19th century United States, state corporation lawsenhanced the rights of corporate boards to govern withoutunanimous consent of shareholders in exchange forstatutory benefits like appraisal rights, to make corporategovernance more efficient. Since that time, and becausemost large publicly traded corporations in the US areincorporated under corporate administration friendlyDelaware law, and because the USs wealth has beenincreasingly securitized into various corporate entities andinstitutions, the rights of individual owners and shareholdershave become increasingly derivative and dissipated. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 25 MBA,email1966patel@gmail.com
  • In the 20th century in the immediate aftermath of the Wall StreetCrash of 1929 legal scholars such as Adolf Augustus Berle, Edwin Dodd,and Gardiner C. Means pondered on the changing role of the moderncorporation in society. Berle and Means monograph "The ModernCorporation and Private Property" (1932, Macmillan) continues to havea profound influence on the conception of corporate governance inscholarly debates today. From the Chicago school of economics, RonaldCoases "The Nature of the Firm" (1937) introduced the notion oftransaction costs into the understanding of why firms are founded andhow they continue to behave. Fifty years later, Eugene Fama andMichael Jensens "The Separation of Ownership and Control" (1983,Journal of Law and Economics) firmly established agency theory as away of understanding corporate governance: the firm is seen as aseries of contracts. Agency theorys dominance was highlighted in a1989 article by Kathleen Eisenhardt ("Agency theory: an assessmentand review", Academy of Management Review). by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 26 MBA,email1966patel@gmail.com
  • US expansion after World War II through the emergence ofmultinational corporations saw the establishment of themanagerial class. Accordingly, the following HarvardBusiness School management professors publishedinfluential monographs studying their prominence: MylesMace (entrepreneurship), Alfred D. Chandler, Jr. (businesshistory), Jay Lorsch (organizational behavior) and ElizabethMacIver (organizational behavior). According to Lorsch andMacIver "many large corporations have dominant controlover business affairs without sufficient accountability ormonitoring by their board of directors." by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 27 MBA,email1966patel@gmail.com
  • Over the past three decades, corporate directors’ duties inthe U.S. have expanded beyond their traditional legalresponsibility of duty of loyalty to the corporation and itsshareholders.In the first half of the 1990s, the issue of corporategovernance in the U.S. received considerable press attentiondue to the wave of CEO dismissals (e.g.: IBM, Kodak,Honeywell) by their boards. The California Public EmployeesRetirement System (CalPERS) led a wave of institutionalshareholder activism (something only very rarely seenbefore), as a way of ensuring that corporate value would notbe destroyed by the now traditionally cozy relationshipsbetween the CEO and the board of directors (e.g., by theunrestrained issuance of stock options, not infrequently backdated). by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 28 MBA,email1966patel@gmail.com
  • In 1997, the East Asian Financial Crisisseverely affected the economies ofThailand, Indonesia, South Korea,Malaysia, and the Philippines through theexit of foreign capital after property assetscollapsed. The lack of corporategovernance mechanisms in thesecountries highlighted the weaknesses ofthe institutions in their economies. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 29 MBA,email1966patel@gmail.com
  • In the early 2000s, the massive bankruptcies(and criminal malfeasance) of Enron andWorldcom, as well as lesser corporatescandals, such as Adelphia Communications,AOL, Arthur Andersen, Global Crossing, Tyco,led to increased political interest in corporategovernance. This is reflected in the passage ofthe Sarbanes-Oxley Act of 2002. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 30 MBA,email1966patel@gmail.com
  • Parties to corporate governanceThe most influential parties involved in corporategovernance include government agencies andauthorities, stock exchanges, management(including the board of directors and its chair, theChief Executive Officer or the equivalent, otherexecutives and line management, shareholders andauditors). Other influential stakeholders mayinclude lenders, suppliers, employees, creditors,customers and the community at large. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 31 MBA,email1966patel@gmail.com
  • The agency view of the corporation posits that theshareholder forgoes decision rights (control) andentrusts the manager to act in the shareholdersbest (joint) interests. Partly as a result of thisseparation between the two investors andmanagers, corporate governance mechanismsinclude a system of controls intended to help alignmanagers incentives with those of shareholders.Agency concerns (risk) are necessarily lower for acontrolling shareholder. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 32 MBA,email1966patel@gmail.com
  • A board of directors is expected to play akey role in corporate governance. Theboard has the responsibility of endorsingthe organizations strategy, developingdirectional policy, appointing, supervisingand remunerating senior executives, andensuring accountability of theorganization to its investors andauthorities. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 33 MBA,email1966patel@gmail.com
  • All parties to corporate governance have an interest, whether director indirect, in the financial performance of the corporation.Directors, workers and management receive salaries, benefits andreputation, while investors expect to receive financial returns. Forlenders, it is specified interest payments, while returns to equityinvestors arise from dividend distributions or capital gains on theirstock. Customers are concerned with the certainty of the provisionof goods and services of an appropriate quality; suppliers areconcerned with compensation for their goods or services, andpossible continued trading relationships. These parties provide valueto the corporation in the form of financial, physical, human andother forms of capital. Many parties may also be concerned withcorporate social performance. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 34 MBA,email1966patel@gmail.com
  • A key factor in a partys decision to participate in or engagewith a corporation is their confidence that the corporationwill deliver the partys expected outcomes. When categoriesof parties (stakeholders) do not have sufficient confidencethat a corporation is being controlled and directed in amanner consistent with their desired outcomes, they areless likely to engage with the corporation. When thisbecomes an endemic system feature, the loss of confidenceand participation in markets may affect many otherstakeholders, and increases the likelihood of political action.There is substantial interest in how external systems andinstitutions, including markets, influence corporategovernance. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 35 MBA,email1966patel@gmail.com
  • Control and ownership structuresControl and ownership structure refers to the types and composition ofshareholders in a corporation. In some countries such as most of ContinentalEurope, ownership is not necessarily equivalent to control due to the existence ofe.g. dual-class shares, ownership pyramids, voting coalitions, proxy votes andclauses in the articles of association that confer additional voting rights to long-term shareholders. Ownership is typically defined as the ownership of cash flowrights whereas control refers to ownership of control or voting rights. Researchersoften "measure" control and ownership structures by using some observablemeasures of control and ownership concentration or the extent of inside control andownership. Some features or types of control and ownership structure involvingcorporate groups include pyramids, cross-shareholdings, rings, and webs. German"concerns" (Konzern) are legally recognized corporate groups with complexstructures. Japanese keiretsu (系列) and South Korean chaebol (which tend to befamily-controlled) are corporate groups which consist of complex interlockingbusiness relationships and shareholdings. Cross-shareholding are an essentialfeature of keiretsu and chaebol groups.Corporate engagement with shareholdersand other stakeholders can differ substantially across different control andownership structures. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 36 MBA,email1966patel@gmail.com
  • Family controlIn many jurisdictions, family interests dominate ownership andcontrol structures. It is sometimes suggested that corporationscontrolled by family interests are subject to superior oversightcompared to corporations "controlled" by institutional investors (orwith such diverse share ownership that they are controlled bymanagement). A recent study by Credit Suisse found that companiesin which "founding families retain a stake of more than 10% of thecompanys capital enjoyed a superior performance over theirrespective sectorial peers." Since 1996, this superior performanceamounts to 8% per year. Forget the celebrity CEO. "Look beyond SixSigma and the latest technology fad. A study by Business Week claimsthat "BW identified five key ingredients that contribute to superiorperformance. Not all are qualities are unique to enterprises withretained family interests." by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 37 MBA,email1966patel@gmail.com
  • The significance of institutional investors variessubstantially across countries. In developedAnglo-American countries (Australia, Canada,New Zealand, U.K., U.S.), institutional investorsdominate the market for stocks in largercorporations. While the majority of the sharesin the Japanese market are held by financialcompanies and industrial corporations, theseare not institutional investors if their holdingsare largely with-on group. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 38 MBA,email1966patel@gmail.com
  • The largest pools of invested money (such as the mutual fundVanguard 500, or the largest investment management firmfor corporations, State Street Corp.) are designed to maximizethe benefits of diversified investment by investing in a verylarge number of different corporations with sufficientliquidity. The idea is this strategy will largely eliminateindividual firm financial or other risk and. A consequence ofthis approach is that these investors have relatively littleinterest in the governance of a particular corporation. It isoften assumed that, if institutional investors pressing for willlikely be costly because of "golden handshakes") or the effortrequired, they will simply sell out their interest. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 39 MBA,email1966patel@gmail.com
  • Mechanisms and controlsCorporate governance mechanisms and controls aredesigned to reduce the inefficiencies that arise frommoral hazard and adverse selection. For example, tomonitor managers behavior, an independent thirdparty (the external auditor) attests the accuracy ofinformation provided by management to investors. Anideal control system should regulate both motivationand ability. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 40 MBA,email1966patel@gmail.com
  • Internal corporate governance controlsInternal corporate governance controlsmonitor activities and then take correctiveaction to accomplish organisational goals.Examples include: by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 41 MBA,email1966patel@gmail.com
  • •Monitoring by the board of directors: The board of directors, withits legal authority to hire, fire and compensate top management,safeguards invested capital. Regular board meetings allow potentialproblems to be identified, discussed and avoided. Whilst non-executive directors are thought to be more independent, they maynot always result in more effective corporate governance and maynot increase performance. Different board structures are optimal fordifferent firms. Moreover, the ability of the board to monitor thefirms executives is a function of its access to information. Executivedirectors possess superior knowledge of the decision-making processand therefore evaluate top management on the basis of the qualityof its decisions that lead to financial performance outcomes, ex ante.It could be argued, therefore, that executive directors look beyondthe financial criteria. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 42 MBA,email1966patel@gmail.com
  • •Internal control procedures and internal auditors: Internalcontrol procedures are policies implemented by an entitysboard of directors, audit committee, management, and otherpersonnel to provide reasonable assurance of the entityachieving its objectives related to reliable financial reporting,operating efficiency, and compliance with laws andregulations. Internal auditors are personnel within anorganization who test the design and implementation of theentitys internal control procedures and the reliability of itsfinancial reporting by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 43 MBA,email1966patel@gmail.com
  • •Balance of power: The simplest balance of power isvery common; require that the President be adifferent person from the Treasurer. This applicationof separation of power is further developed incompanies where separate divisions check andbalance each others actions. One group may proposecompany-wide administrative changes, another groupreview and can veto the changes, and a third groupcheck that the interests of people (customers,shareholders, employees) outside the three groupsare being met. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 44 MBA,email1966patel@gmail.com
  • •Remuneration: Performance-basedremuneration is designed to relate someproportion of salary to individual performance.It may be in the form of cash or non-cashpayments such as shares and share options,superannuation or other benefits. Suchincentive schemes, however, are reactive in thesense that they provide no mechanism forpreventing mistakes or opportunistic behavior,and can elicit myopic behavior. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 45 MBA,email1966patel@gmail.com
  • •Monitoring by large shareholders and/ormonitoring by banks and other large creditors:Given their large investment in the firm, thesestakeholders have the incentives, combinedwith the right degree of control and power, tomonitor the management. by Dr.Rajesh Patel,Director,NRV 1/20/2012 9:45:37 PM 46 MBA,email1966patel@gmail.com
  • by Dr.Rajesh Patel,Director,NRV1/20/2012 9:45:37 PM 47 MBA,email1966patel@gmail.com
  • by Dr.Rajesh Patel,Director,NRV1/20/2012 9:45:37 PM 48 MBA,email1966patel@gmail.com
  • by Dr.Rajesh Patel,Director,NRV1/20/2012 9:45:37 PM 49 MBA,email1966patel@gmail.com
  • by Dr.Rajesh Patel,Director,NRV1/20/2012 9:45:37 PM 50 MBA,email1966patel@gmail.com