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Chapter 2 Financial Goals and Corporate Governance
Who Owns the Business? ,[object Object],[object Object],[object Object]
Exhibit 2.1  Who Owns the Business? [Insert Exhibit 2.1]
Separation of Ownership from Management ,[object Object],[object Object]
The Goal of Management ,[object Object],[object Object],[object Object]
The Goal of Management ,[object Object],[object Object]
Shareholder Wealth Maximization ,[object Object],[object Object]
Shareholder Wealth Maximization ,[object Object],[object Object],[object Object]
Shareholder Wealth Maximization ,[object Object],[object Object],[object Object],[object Object]
Shareholder Wealth Maximization ,[object Object],[object Object],[object Object],[object Object],[object Object]
Shareholder Wealth Maximization ,[object Object],[object Object],[object Object]
Shareholder Wealth Maximization ,[object Object],[object Object],[object Object]
Stakeholder Capitalism Model ,[object Object],[object Object],[object Object],[object Object]
Stakeholder Capitalism Model ,[object Object],[object Object],[object Object]
Stakeholder Capitalism Model ,[object Object],[object Object],[object Object]
Operational Goals for MNEs ,[object Object],[object Object],[object Object],[object Object],[object Object]
Corporate Governance ,[object Object],[object Object]
Corporate Governance ,[object Object],[object Object]
Corporate Governance ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Structure of Corporate Governance ,[object Object],[object Object],[object Object]
Exhibit 2.2  The Structure of Corporate Governance
Structure of Corporate Governance ,[object Object],[object Object]
Structure of Corporate Governance ,[object Object],[object Object],[object Object],[object Object]
Exhibit 2.3  Comparative Corporate Governance Regimes
Failures in Corporate Governance ,[object Object],[object Object],[object Object],[object Object]
Corporate Governance Reform Within the United States and the United Kingdom, the main corporate governance problem is the one treated by agency theory: with widespread share ownership, how can a firm align management’s interest with that of the shareholders? Because individual shareholders do not have the resources or the power to monitor management, the U.S. and U.K. markets rely on regulators to assist in the agency theory monitoring task. Outside the U.S. and U.K., large, controlling shareholders are in the majority – these entities are able to monitor management in some ways better than the regulators can.
The Sarbanes-Oxley Act ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Additional Corporate Governance Issues ,[object Object],[object Object],[object Object]
Mini-Case Questions: Governance Failure at Enron ,[object Object],[object Object],[object Object]
Additional Chapter Exhibits Chapter 2
Exhibit 2.4  Country Governance Rankings 2008
Exhibit 2.5  The Premium Paid for Voting Shares: Accounting Standards
Exhibit 2.6  The Premium Paid for Voting Shares: Law Enforcement
Exhibit 2.7  U.S. Director Independence 2008
Exhibit 2.8  Potential Responses to Shareholder Dissatisfaction
Exhibit 1  Enron’s Actual Operating Income

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M02 eiteman0136091008 12_mbf_c02

  • 1. Chapter 2 Financial Goals and Corporate Governance
  • 2.
  • 3. Exhibit 2.1 Who Owns the Business? [Insert Exhibit 2.1]
  • 4.
  • 5.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 20.
  • 21. Exhibit 2.2 The Structure of Corporate Governance
  • 22.
  • 23.
  • 24. Exhibit 2.3 Comparative Corporate Governance Regimes
  • 25.
  • 26. Corporate Governance Reform Within the United States and the United Kingdom, the main corporate governance problem is the one treated by agency theory: with widespread share ownership, how can a firm align management’s interest with that of the shareholders? Because individual shareholders do not have the resources or the power to monitor management, the U.S. and U.K. markets rely on regulators to assist in the agency theory monitoring task. Outside the U.S. and U.K., large, controlling shareholders are in the majority – these entities are able to monitor management in some ways better than the regulators can.
  • 27.
  • 28.
  • 29.
  • 31. Exhibit 2.4 Country Governance Rankings 2008
  • 32. Exhibit 2.5 The Premium Paid for Voting Shares: Accounting Standards
  • 33. Exhibit 2.6 The Premium Paid for Voting Shares: Law Enforcement
  • 34. Exhibit 2.7 U.S. Director Independence 2008
  • 35. Exhibit 2.8 Potential Responses to Shareholder Dissatisfaction
  • 36. Exhibit 1 Enron’s Actual Operating Income