Corporate governance involves establishing order between a firm's owners and managers. It uses internal mechanisms like boards of directors and executive compensation, and external mechanisms like markets for corporate control. The separation of ownership and control in modern corporations creates an agency problem where manager and shareholder goals may conflict. Governance seeks to align manager and shareholder interests through monitoring and incentive structures.
The document discusses strategic enterprise management and how to align corporate objectives and human capital. It introduces using a balanced scorecard approach and competency models to integrate performance management, compensation, and talent development processes. This would help organizations effectively implement business strategies and leverage human capital contributions.
Corporate governance is used to monitor and control managers' strategic decisions by establishing order between a firm's owners and its top-level managers. It became necessary due to the separation of ownership and managerial control in modern corporations. Agency theory holds that conflicts can arise between principals (owners) and agents (managers) if their goals are not properly aligned. Various internal mechanisms like ownership concentration, boards of directors, and executive compensation seek to mitigate these agency problems and ensure managers make decisions that reflect owners' interests.
How To Develop A Total Compensation Strategynlomas
This document outlines key steps for developing a total compensation strategy, including defining compensation and strategy, making strategic choices, and tailoring compensation systems to business strategy. It discusses assessing total compensation implications, mapping a compensation strategy, and implementing the strategy. The goal is to motivate performance through the right mix of base salary, short and long-term incentives, and benefits.
This document discusses organizational change and the challenges of managing in turbulent times. It identifies several driving forces of change, including advancing technology, increasing workforce diversity, rising public expectations of corporate social responsibility, tougher global competition, and the need to satisfy multiple stakeholders. Effective management requires navigating these challenges through planning, organizing, leading, and controlling organizational resources to achieve goals in an efficient and effective way.
The changing face of reward examines how the business drivers of reward are changing due to the impact of the global downturn and other macroeconomic trends in the global economy.
This document discusses managerial and quality control. It covers the basic mechanisms for controlling organizations, including the basic structure and objectives of the control process. It describes controlling financial performance and the changing philosophy of control. Recent trends in quality management and control systems for turbulent environments are also addressed. The types of control - feedforward, concurrent, and feedback control - are defined. Budgetary control and responsibility centers are examined. Traditional budgeting methods and the role of financial statements in control are also summarized.
The document discusses organizational structure and controls. It defines organizational structure and controls, and the difference between strategic and financial controls. It describes how organizational structure specifies reporting relationships, procedures, authority, and decision making to implement strategy. Structure provides stability and flexibility. The document also outlines different types of organizational structures including simple, functional, and multidivisional structures and how they relate to implementing different business strategies.
Lean Six Sigma Deployment Robin Gates Asq Quality Progress Article Aug ...Robin Gates
The document provides guidance on successfully deploying Lean Six Sigma. It emphasizes the importance of:
1) Carefully planning the deployment by answering difficult questions about goals, leadership, and organizational fit before starting. In particular, identifying specific metrics and accountable stakeholders is critical.
2) Understanding internal customer requirements through tools like a "critical to" tree to ensure the deployment meets their needs.
3) Choosing an appropriate deployment model based on organizational factors and carefully mapping out the course of action.
4) Maintaining focus on high priority business goals to select relevant projects and keep the deployment meaningful over the long run. Proper planning and preparation are keys to starting the Lean Six Sigma journey on the right foot
The document discusses strategic enterprise management and how to align corporate objectives and human capital. It introduces using a balanced scorecard approach and competency models to integrate performance management, compensation, and talent development processes. This would help organizations effectively implement business strategies and leverage human capital contributions.
Corporate governance is used to monitor and control managers' strategic decisions by establishing order between a firm's owners and its top-level managers. It became necessary due to the separation of ownership and managerial control in modern corporations. Agency theory holds that conflicts can arise between principals (owners) and agents (managers) if their goals are not properly aligned. Various internal mechanisms like ownership concentration, boards of directors, and executive compensation seek to mitigate these agency problems and ensure managers make decisions that reflect owners' interests.
How To Develop A Total Compensation Strategynlomas
This document outlines key steps for developing a total compensation strategy, including defining compensation and strategy, making strategic choices, and tailoring compensation systems to business strategy. It discusses assessing total compensation implications, mapping a compensation strategy, and implementing the strategy. The goal is to motivate performance through the right mix of base salary, short and long-term incentives, and benefits.
This document discusses organizational change and the challenges of managing in turbulent times. It identifies several driving forces of change, including advancing technology, increasing workforce diversity, rising public expectations of corporate social responsibility, tougher global competition, and the need to satisfy multiple stakeholders. Effective management requires navigating these challenges through planning, organizing, leading, and controlling organizational resources to achieve goals in an efficient and effective way.
The changing face of reward examines how the business drivers of reward are changing due to the impact of the global downturn and other macroeconomic trends in the global economy.
This document discusses managerial and quality control. It covers the basic mechanisms for controlling organizations, including the basic structure and objectives of the control process. It describes controlling financial performance and the changing philosophy of control. Recent trends in quality management and control systems for turbulent environments are also addressed. The types of control - feedforward, concurrent, and feedback control - are defined. Budgetary control and responsibility centers are examined. Traditional budgeting methods and the role of financial statements in control are also summarized.
The document discusses organizational structure and controls. It defines organizational structure and controls, and the difference between strategic and financial controls. It describes how organizational structure specifies reporting relationships, procedures, authority, and decision making to implement strategy. Structure provides stability and flexibility. The document also outlines different types of organizational structures including simple, functional, and multidivisional structures and how they relate to implementing different business strategies.
Lean Six Sigma Deployment Robin Gates Asq Quality Progress Article Aug ...Robin Gates
The document provides guidance on successfully deploying Lean Six Sigma. It emphasizes the importance of:
1) Carefully planning the deployment by answering difficult questions about goals, leadership, and organizational fit before starting. In particular, identifying specific metrics and accountable stakeholders is critical.
2) Understanding internal customer requirements through tools like a "critical to" tree to ensure the deployment meets their needs.
3) Choosing an appropriate deployment model based on organizational factors and carefully mapping out the course of action.
4) Maintaining focus on high priority business goals to select relevant projects and keep the deployment meaningful over the long run. Proper planning and preparation are keys to starting the Lean Six Sigma journey on the right foot
Do annual performance reviews help mission-driven organizations succeed or are they just another administrative function that takes time away from more important things? We believe that a well designed system can provide positive feedback to employees helping them do a better job and create a stronger organization. But doing so in the proper setting, context, and manner is critical to carrying out successful performance reviews. We'll show you how during this 60-minute design strategy workshop.
We take immense pleasure in unveiling the inaugural issue of our newsletter, “Ab Initio”. The literal translation of this Latin term is “from the beginning”, rendering it an apt name for our newsletter, which is aimed at putting forth a fundamental perspective on topical management-related issues.
This document discusses various factors related to corporate governance and financial reporting. It includes summaries of several reports on corporate governance issues:
1. It outlines factors that can undermine confidence in financial reporting such as loose accounting standards, lack of oversight of directors, and competitive pressures.
2. It summarizes key recommendations from reports such as Cadbury (1992), Greenbury (1995), Higgs (1998), Turnbull (1999), and Smith (2003) regarding issues like separating the CEO and chairman roles, increasing independent directors, overseeing executive pay, and strengthening auditing practices.
3. It proposes a group assignment discussing which recommendations from these reports have been implemented in students' home countries and which have not and why
This chapter discusses acquisition and restructuring strategies. It defines mergers, acquisitions, and takeovers and describes horizontal, vertical, and related acquisitions. Reasons for acquisitions include increasing market power, overcoming barriers to entry, and diversification. Problems with acquisitions include integration difficulties, overpayment, large debt loads, and failure to achieve synergies. The chapter also defines downsizing, downscoping, and leveraged buyouts as restructuring strategies and outlines their short-term impacts like reduced costs versus long-term impacts on performance and risk.
A Paradigm Shift - Overcoming a siloed HSMSRakesh Maharaj
The document discusses transforming an organization's occupational health and safety management system (OH&SMS) using an applied systems thinking approach. It explores the historical perspectives of health, safety and environmental management at the organization. It then discusses diagnosing the current system using systems analysis and redesigning it using an interactive planning process that involves stakeholders to better align the OH&SMS with business goals and improve performance. The transformation led to improved department integration, risk control, and staff engagement in the OH&SMS.
Corporate governance involves establishing order between a firm's owners and managers through mechanisms like boards of directors and executive compensation. The separation of ownership and control in modern corporations creates an agency problem where the interests of shareholders and managers may not be aligned. Various governance mechanisms attempt to monitor managers and incentivize them to act in shareholders' best interests.
Are you managing the risk of change? Would your projects or business events deliver higher results with a stronger focus on change management? PeopleFirm’s experienced team and proven methodology can provide your organization with a customized roadmap to drive business readiness, engagement, and adoption in support of your next change.
This document discusses change management and its importance in delivering value. It summarizes that organizations that invest in change management see real benefits, delivering on average 143% of expected returns, compared to only 35% for those at the bottom. Key benefits included higher employee engagement, lower turnover rates, and sustained value over 5 years. Effective change management addresses the top barriers to adoption like lack of leadership support and employee resistance. The document promotes the services of PeopleFirm in providing customized change management solutions and roadmaps.
Change Management delivers value. A 2006 study found that organizations that effectively managed change saw 143% returns, while ineffective change management led to only 35% returns. Benefits of change management included higher employee engagement, lower turnover rates over 5 years, and sustained value delivery. To be successful, a change program must address the top four barriers to adoption: ineffective leadership, employee resistance, poor middle management support, and lack of resources and planning. PeopleFirm provides customized change management services and roadmaps to drive business readiness, engagement, and adoption.
This document discusses change management and its importance in delivering value and benefits to organizations undergoing change. It summarizes that effective change management is critical for the success of any project or initiative and ensures high levels of employee engagement, lower turnover rates, and tangible financial benefits over 5 years. When organizations invest in change management, they deliver 143% of expected returns on average, compared to only 35% for those with less effective change management.
This introduction to Strategic Agility summarizes insights for the necessity to change business practices to succeed in a world where competitive advantages are now fleeting.
The document discusses various approaches to defining and measuring firm performance, including accounting measures like profitability and leverage ratios, market-based measures like Sharpe's measure and Treynor's measure, and other approaches like survival analysis, present value analysis, and the balanced scorecard. It also defines key concepts like above average, average, and below average returns and examines strengths and weaknesses of different performance measurement approaches.
Corporate Goverance -The role of investment banker directors in M&A Alicia Liu
1) The study examines how the presence of directors with investment banking experience influences firms' acquisition behavior and firm value.
2) Preliminary results show that the proportion of firms appointing investment banker directors to their boards has increased over time. Firms with investment banker directors are more likely to be larger and have higher leverage.
3) Regression analysis indicates that firms with investment banker directors on their boards are more likely to make acquisitions. This positive relationship between investment banker directors and acquisition likelihood is not driven by endogenous director selection factors.
Charles Bayless held several leadership roles in North America and globally. His roles included leading Capgemini's alliances and technologies business in North America, managing key accounts such as Ernst & Young, and leading sectors like consumer products & retail. In these roles, he worked to consolidate activities, establish performance metrics, rationalize investments, and increase coordination & results. Through his efforts, annual bookings, revenues, and profits improved significantly.
Here are a few key considerations in evaluating this opportunity:
- The $100,000 annual loss is a quantifiable cost to Disney that will reduce firm value. However, there are also social benefits to opening the store that do not accrue directly to Disney.
- Creating employment in an area of high unemployment could have significant social value by improving lives and economic conditions in the community. This may indirectly benefit Disney over the long-run by helping grow a customer base.
- Revitalizing the neighborhood may have spillover effects that are difficult to quantify but could benefit Disney and society. A thriving community could attract other businesses.
- There is a risk the store underperforms expectations and losses are greater than estimated
Introduction to Corporate Governance Sep 17 2011Demir Yener
Introductory remarks on good corporate governance practices and implications on board performance and rights and responsibilities for Mongolian directors.
This document provides an introduction and overview of the FIN1613: Business Finance course at the Australian School of Business, UNSW. It outlines the key concepts that will be covered, including world views on business ownership and investment decisions. It discusses the roles and responsibilities of financial managers in making investment and financing decisions. It also defines important terminology related to firm ownership structures, including sole traders, partnerships, corporations, equity, debt, and agency costs. The document compares the characteristics of different types of business entities and ownership.
1) Traditional corporate finance theory holds that the objective of the firm is to maximize stockholder wealth by maximizing the stock price. However, in practice managers do not always act in the best interests of stockholders.
2) Mechanisms meant to discipline management, such as annual meetings and boards of directors, are not always effective. Boards are often comprised of directors with close ties to management who lack incentives to challenge managers.
3) When stockholders have little control over managers, managers may pursue their own interests over stockholder interests through actions like greenmail or generous golden parachutes without stockholder approval.
Peter Watson's Presentation on Talent Retention at the 2011 HR Summitpkwatson2099
What actions can you take to retain the top talents in your organisation? There are hundreds of options but your resources are limited and so sorting out which ones will have the maximum impact is absolutely critical for the success of your HR strategy. See examples of how I addressed talent retention with organisational development activities as well as targeted programs. However, one critical success factors operates across all interventions - the positive engagement and involvement of the immediate manager. Find out more and see if these actions can help your organisation.
Understanding and Implementing Governance for SharePoint 2010 by Bill English...SPTechCon
Governance involves a set of relationships and control mechanisms that balance competing interests between stakeholders to attain organizational goals. It connects risk, which stems from self-interested behavior, to compliance with standards and regulations. Most governance implementations that fail do so due to a lack of identified risks and compliance demands. SharePoint implementations can surface gaps in an organization's business model or culture if governance is not properly established.
Do annual performance reviews help mission-driven organizations succeed or are they just another administrative function that takes time away from more important things? We believe that a well designed system can provide positive feedback to employees helping them do a better job and create a stronger organization. But doing so in the proper setting, context, and manner is critical to carrying out successful performance reviews. We'll show you how during this 60-minute design strategy workshop.
We take immense pleasure in unveiling the inaugural issue of our newsletter, “Ab Initio”. The literal translation of this Latin term is “from the beginning”, rendering it an apt name for our newsletter, which is aimed at putting forth a fundamental perspective on topical management-related issues.
This document discusses various factors related to corporate governance and financial reporting. It includes summaries of several reports on corporate governance issues:
1. It outlines factors that can undermine confidence in financial reporting such as loose accounting standards, lack of oversight of directors, and competitive pressures.
2. It summarizes key recommendations from reports such as Cadbury (1992), Greenbury (1995), Higgs (1998), Turnbull (1999), and Smith (2003) regarding issues like separating the CEO and chairman roles, increasing independent directors, overseeing executive pay, and strengthening auditing practices.
3. It proposes a group assignment discussing which recommendations from these reports have been implemented in students' home countries and which have not and why
This chapter discusses acquisition and restructuring strategies. It defines mergers, acquisitions, and takeovers and describes horizontal, vertical, and related acquisitions. Reasons for acquisitions include increasing market power, overcoming barriers to entry, and diversification. Problems with acquisitions include integration difficulties, overpayment, large debt loads, and failure to achieve synergies. The chapter also defines downsizing, downscoping, and leveraged buyouts as restructuring strategies and outlines their short-term impacts like reduced costs versus long-term impacts on performance and risk.
A Paradigm Shift - Overcoming a siloed HSMSRakesh Maharaj
The document discusses transforming an organization's occupational health and safety management system (OH&SMS) using an applied systems thinking approach. It explores the historical perspectives of health, safety and environmental management at the organization. It then discusses diagnosing the current system using systems analysis and redesigning it using an interactive planning process that involves stakeholders to better align the OH&SMS with business goals and improve performance. The transformation led to improved department integration, risk control, and staff engagement in the OH&SMS.
Corporate governance involves establishing order between a firm's owners and managers through mechanisms like boards of directors and executive compensation. The separation of ownership and control in modern corporations creates an agency problem where the interests of shareholders and managers may not be aligned. Various governance mechanisms attempt to monitor managers and incentivize them to act in shareholders' best interests.
Are you managing the risk of change? Would your projects or business events deliver higher results with a stronger focus on change management? PeopleFirm’s experienced team and proven methodology can provide your organization with a customized roadmap to drive business readiness, engagement, and adoption in support of your next change.
This document discusses change management and its importance in delivering value. It summarizes that organizations that invest in change management see real benefits, delivering on average 143% of expected returns, compared to only 35% for those at the bottom. Key benefits included higher employee engagement, lower turnover rates, and sustained value over 5 years. Effective change management addresses the top barriers to adoption like lack of leadership support and employee resistance. The document promotes the services of PeopleFirm in providing customized change management solutions and roadmaps.
Change Management delivers value. A 2006 study found that organizations that effectively managed change saw 143% returns, while ineffective change management led to only 35% returns. Benefits of change management included higher employee engagement, lower turnover rates over 5 years, and sustained value delivery. To be successful, a change program must address the top four barriers to adoption: ineffective leadership, employee resistance, poor middle management support, and lack of resources and planning. PeopleFirm provides customized change management services and roadmaps to drive business readiness, engagement, and adoption.
This document discusses change management and its importance in delivering value and benefits to organizations undergoing change. It summarizes that effective change management is critical for the success of any project or initiative and ensures high levels of employee engagement, lower turnover rates, and tangible financial benefits over 5 years. When organizations invest in change management, they deliver 143% of expected returns on average, compared to only 35% for those with less effective change management.
This introduction to Strategic Agility summarizes insights for the necessity to change business practices to succeed in a world where competitive advantages are now fleeting.
The document discusses various approaches to defining and measuring firm performance, including accounting measures like profitability and leverage ratios, market-based measures like Sharpe's measure and Treynor's measure, and other approaches like survival analysis, present value analysis, and the balanced scorecard. It also defines key concepts like above average, average, and below average returns and examines strengths and weaknesses of different performance measurement approaches.
Corporate Goverance -The role of investment banker directors in M&A Alicia Liu
1) The study examines how the presence of directors with investment banking experience influences firms' acquisition behavior and firm value.
2) Preliminary results show that the proportion of firms appointing investment banker directors to their boards has increased over time. Firms with investment banker directors are more likely to be larger and have higher leverage.
3) Regression analysis indicates that firms with investment banker directors on their boards are more likely to make acquisitions. This positive relationship between investment banker directors and acquisition likelihood is not driven by endogenous director selection factors.
Charles Bayless held several leadership roles in North America and globally. His roles included leading Capgemini's alliances and technologies business in North America, managing key accounts such as Ernst & Young, and leading sectors like consumer products & retail. In these roles, he worked to consolidate activities, establish performance metrics, rationalize investments, and increase coordination & results. Through his efforts, annual bookings, revenues, and profits improved significantly.
Here are a few key considerations in evaluating this opportunity:
- The $100,000 annual loss is a quantifiable cost to Disney that will reduce firm value. However, there are also social benefits to opening the store that do not accrue directly to Disney.
- Creating employment in an area of high unemployment could have significant social value by improving lives and economic conditions in the community. This may indirectly benefit Disney over the long-run by helping grow a customer base.
- Revitalizing the neighborhood may have spillover effects that are difficult to quantify but could benefit Disney and society. A thriving community could attract other businesses.
- There is a risk the store underperforms expectations and losses are greater than estimated
Introduction to Corporate Governance Sep 17 2011Demir Yener
Introductory remarks on good corporate governance practices and implications on board performance and rights and responsibilities for Mongolian directors.
This document provides an introduction and overview of the FIN1613: Business Finance course at the Australian School of Business, UNSW. It outlines the key concepts that will be covered, including world views on business ownership and investment decisions. It discusses the roles and responsibilities of financial managers in making investment and financing decisions. It also defines important terminology related to firm ownership structures, including sole traders, partnerships, corporations, equity, debt, and agency costs. The document compares the characteristics of different types of business entities and ownership.
1) Traditional corporate finance theory holds that the objective of the firm is to maximize stockholder wealth by maximizing the stock price. However, in practice managers do not always act in the best interests of stockholders.
2) Mechanisms meant to discipline management, such as annual meetings and boards of directors, are not always effective. Boards are often comprised of directors with close ties to management who lack incentives to challenge managers.
3) When stockholders have little control over managers, managers may pursue their own interests over stockholder interests through actions like greenmail or generous golden parachutes without stockholder approval.
Peter Watson's Presentation on Talent Retention at the 2011 HR Summitpkwatson2099
What actions can you take to retain the top talents in your organisation? There are hundreds of options but your resources are limited and so sorting out which ones will have the maximum impact is absolutely critical for the success of your HR strategy. See examples of how I addressed talent retention with organisational development activities as well as targeted programs. However, one critical success factors operates across all interventions - the positive engagement and involvement of the immediate manager. Find out more and see if these actions can help your organisation.
Understanding and Implementing Governance for SharePoint 2010 by Bill English...SPTechCon
Governance involves a set of relationships and control mechanisms that balance competing interests between stakeholders to attain organizational goals. It connects risk, which stems from self-interested behavior, to compliance with standards and regulations. Most governance implementations that fail do so due to a lack of identified risks and compliance demands. SharePoint implementations can surface gaps in an organization's business model or culture if governance is not properly established.
Corporate governance involves establishing order between a firm's owners and top-level managers to effectively direct strategic decisions and ensure accountability. It addresses the separation of ownership and control through internal mechanisms like boards of directors and executive compensation, and external mechanisms like the market for corporate control. However, divergent interests between owners and managers can lead to agency problems if not properly monitored and controlled.
1) The document discusses management compensation, comparing managerial compensation to executive compensation. It provides examples of compensation components like base pay, bonuses, stock options, and benefits.
2) It also discusses how firms can mitigate principal-agent problems in compensation, such as tying pay to long-term performance, cutting cash pay for distressed firms, and replacing top managers.
3) The Chevron example shows how compensation committees establish executive pay, with goals of setting incentive plans and producing compensation reports.
Directors are responsible for establishing the company's mission, vision and values to guide its strategic direction. They decide on strategies and structures to ensure the company's survival and prosperity. Directors delegate implementation to management while exercising responsibility to shareholders and other stakeholders to promote their interests. Effective boards establish clear policies and provide oversight, accountability and strategic guidance.
Corporate governance involves establishing order between a firm's owners and top managers. It addresses the agency problem that arises from the separation of ownership and control, where managers may not always act in shareholders' best interests. Governance mechanisms like boards of directors, executive compensation, and market threats aim to align manager and shareholder goals. Effective governance also considers ethical treatment of all stakeholder groups.
Managing an advisory firm's compliance program can be costly. Can this expense also be viewed as an investment? Learn how your compliance efforts can help you manage your firm more effectively.
This document discusses driving employee engagement and creating a learning and performance culture. It recommends using engagement surveys and modern technology tools to get employee input and promote learning. A key part of an engaged culture is clear expectations, advancement opportunities, communication, understanding jobs, and business relationships. A learning and performance culture has active learners who take responsibility for their development and retain new ideas, while supervisors promote learning and are open to new approaches. Measuring team performance rather than individuals can further increase engagement.
The document discusses the objective of maximizing firm value in corporate finance. It notes that traditional theory holds that managers should maximize stockholder wealth by investing in projects with returns above the hurdle rate, using financing that minimizes costs, and returning excess cash to shareholders. However, it also discusses criticisms of this view and how managers' interests may diverge from stockholders in practice, as stockholders have limited control over managers.
The document discusses the objective of maximizing firm value in corporate finance. It notes that traditional theory holds that the objective is to maximize stockholder wealth by maximizing stock price. However, it also discusses some criticisms of this view, such as the fact that maximizing stock price does not necessarily conflict with meeting other objectives like treating employees and customers well. The document also examines some ways in which pursuing stock price maximization alone could potentially go wrong, such as managers prioritizing their own interests over stockholders or significant social costs being ignored.
The document discusses the objective of maximizing firm value in corporate finance. It notes that traditional theory holds that the objective is to maximize stockholder wealth by maximizing stock price. However, it also discusses some criticisms of this view, such as the fact that maximizing stock price does not necessarily conflict with meeting other stakeholder needs. It also examines how the classical objective function of maximizing stockholder wealth through efficient markets can break down in practice due to issues like managers prioritizing their own interests over stockholders and significant social costs not being fully reflected in stock prices.
This document discusses key issues in corporate governance. It begins by defining corporate governance as the interaction between shareholders, the board of directors, and management in directing a company. It then lists 7 main issues: 1) Remuneration and rewarding of directors, 2) The board's responsibility for risk management and internal controls, 3) Reliability of financial reporting and external auditors, 4) Duties of directors, 5) Shareholders' rights and responsibilities, 6) Separation of the CEO and chairperson roles, and 7) Corporate social responsibility and business ethics. For each issue, it provides 1-2 paragraphs explaining the relevance and concerns around each topic.
An overview of managerial finance-IBF-CH#1Junaid hancock
This document provides an overview of managerial finance. It discusses what finance entails, the general areas of finance, and how finance fits within the organizational structure of a firm. It also covers alternative forms of business organization like proprietorships, partnerships, and corporations. The document discusses how corporations aim to maximize shareholder wealth through capital structure, capital budgeting, and dividend policy decisions. It addresses agency relationships between shareholders and managers and factors that can influence stock price. The document concludes with brief discussions of business ethics and reasons why firms operate internationally.
Best practice finance diagnostic review longconradfsr
The document outlines a blueprint for integrating the finance function after a merger and acquisition. It discusses seven critical issues facing Chief Financial Officers as the role of finance shifts from scorekeeper to business partner. The issues include business partnering, performance measurement, information as a competitive asset, organizational skills, cost management, financial risk management, and coordinating improvement projects.
Home Learning Week 81.) What is Corporate Social ResponsibilitSusanaFurman449
Home Learning Week 8
1.) What is Corporate Social Responsibility and why are companies engaged in it?
2.) Discuss the evolving phases of Corporate Social Responsibility
3.) Describe Carroll’s four-part definition of CSR and contrast it to Firedman’s “the business of business is business”
4.) Discuss why companies are engaged in Corporate Social Reporting
Senior Seminar in Business Administration
BUS 499
Corporate Governance
Welcome to Senior Seminar in Business Administration.
In this lesson we will discuss Corporate Governance.
Please go to the next slide.
Objectives
Upon completion of this lesson, you will be able to:
Describe how corporate governance affects strategic decisions
Upon completion of this lesson, you will be able to:
Describe how corporate governance affects strategic decisions.
Please go to the next slide.
Supporting Topics
Separation of Ownership and Managerial Control
Ownership Concentration
Board of Directors
Market for Corporate Control
International Corporate Governance
Governance Mechanisms and Ethical Behavior
In order to achieve these objectives, the following supporting topics will be covered:
Separation of ownership and managerial control;
Ownership concentration;
Board of directors;
Market for corporate control;
International corporate governance; and
Governance mechanisms and ethical behavior.
Please go to the next slide.
Separation of Ownership and Managerial Control
What is Corporate Governance
Shareholders
Purchase stock
Managing of their investment risk
Agency Relationships
Problems
Different interests and goals
Managerial Opportunism
Agency Costs
To start off the lesson, corporate governance is defined as a set of mechanisms used to manage the relationship among stakeholders and to determine and control the strategic direction and performance of organizations. Corporate governance is concerned with identifying ways to ensure that decisions are made effectively and that they facilitate strategic competitiveness. Another way to think of governance is to establish and maintain harmony between parties.
Traditionally, U. S. firms were managed by founder- owners and their descendants. As firms became larger the managerial revolution led to a separation of ownership and control in most large corporations. This control of the firm shifted from entrepreneurs to professional managers while ownership became dispersed among unorganized stockholders. Due to these changes modern public corporation was created and was based on the efficient separation of ownership and managerial control.
The separation of ownership and managerial control allows shareholders to purchase stock. This in turn entitles them to income from the firm’s operations after paying expenses. This requires that shareholders take a risk that the firm’s expenses may exceed its revenues.
Shareholders specialize in managing their investment risk. Those managing small firms also own a significant percentage ...
Digital Marketing with a Focus on Sustainabilitysssourabhsharma
Digital Marketing best practices including influencer marketing, content creators, and omnichannel marketing for Sustainable Brands at the Sustainable Cosmetics Summit 2024 in New York
IMPACT Silver is a pure silver zinc producer with over $260 million in revenue since 2008 and a large 100% owned 210km Mexico land package - 2024 catalysts includes new 14% grade zinc Plomosas mine and 20,000m of fully funded exploration drilling.
Starting a business is like embarking on an unpredictable adventure. It’s a journey filled with highs and lows, victories and defeats. But what if I told you that those setbacks and failures could be the very stepping stones that lead you to fortune? Let’s explore how resilience, adaptability, and strategic thinking can transform adversity into opportunity.
At Techbox Square, in Singapore, we're not just creative web designers and developers, we're the driving force behind your brand identity. Contact us today.
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This presentation is a curated compilation of PowerPoint diagrams and templates designed to illustrate 20 different digital transformation frameworks and models. These frameworks are based on recent industry trends and best practices, ensuring that the content remains relevant and up-to-date.
Key highlights include Microsoft's Digital Transformation Framework, which focuses on driving innovation and efficiency, and McKinsey's Ten Guiding Principles, which provide strategic insights for successful digital transformation. Additionally, Forrester's framework emphasizes enhancing customer experiences and modernizing IT infrastructure, while IDC's MaturityScape helps assess and develop organizational digital maturity. MIT's framework explores cutting-edge strategies for achieving digital success.
These materials are perfect for enhancing your business or classroom presentations, offering visual aids to supplement your insights. Please note that while comprehensive, these slides are intended as supplementary resources and may not be complete for standalone instructional purposes.
Frameworks/Models included:
Microsoft’s Digital Transformation Framework
McKinsey’s Ten Guiding Principles of Digital Transformation
Forrester’s Digital Transformation Framework
IDC’s Digital Transformation MaturityScape
MIT’s Digital Transformation Framework
Gartner’s Digital Transformation Framework
Accenture’s Digital Strategy & Enterprise Frameworks
Deloitte’s Digital Industrial Transformation Framework
Capgemini’s Digital Transformation Framework
PwC’s Digital Transformation Framework
Cisco’s Digital Transformation Framework
Cognizant’s Digital Transformation Framework
DXC Technology’s Digital Transformation Framework
The BCG Strategy Palette
McKinsey’s Digital Transformation Framework
Digital Transformation Compass
Four Levels of Digital Maturity
Design Thinking Framework
Business Model Canvas
Customer Journey Map
3 Simple Steps To Buy Verified Payoneer Account In 2024SEOSMMEARTH
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The Genesis of BriansClub.cm Famous Dark WEb PlatformSabaaSudozai
BriansClub.cm, a famous platform on the dark web, has become one of the most infamous carding marketplaces, specializing in the sale of stolen credit card data.
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1. Corporate Governance
Corporate governance is
a relationship among stakeholders that is used to
determine and control the strategic direction and
performance of organizations
concerned with identifying ways to ensure that
strategic decisions are made effectively
used in corporations to establish order between the
firm’s owners and its top-level managers
1
2. Corporate Governance Mechanisms
Internal Governance Mechanisms
Board of Directors
Managerial Incentive Compensation
Ownership Concentration
External Governance Mechanisms
Market for Corporate Control
2
3. Separation of Ownership and Managerial
Control
Basis of the modern corporation
shareholders purchase stock, becoming residual
claimants
shareholders reduce risk by holding diversified
portfolios
professional managers are contracted to provide
decision-making
Modern public corporation form leads to
efficient specialization of tasks
risk bearing by shareholders
strategy development and decision-making by
managers
3
6. Agency Relationship: Owners and Managers
Shareholders
(Principals)
• Firm owners
Managers
• Decision makers
(Agents)
• Risk bearing specialist (principal)
pays compensation to a An Agency
managerial decision-making Relationship
specialist (agent)
6
7. Agency Theory Problem
The agency problem occurs when:
the desires or goals of the principal and agent
conflict and it is difficult or expensive for the
principal to verify that the agent has behaved
inappropriately
Solution:
principals engage in incentive-based performance
contracts
monitoring mechanisms such as the board of
directors
enforcement mechanisms such as the managerial
labor market to mitigate the agency problem
7
8. Manager and Shareholder Risk and
Diversification
Shareholder Managerial
(business) (employment)
S risk profile risk profile M
Risk
A B
Dominant Related Related Unrelated
Business Constrained Linked Businesses
Diversification
8
9. Governance Mechanisms
Board of Insiders
• The firm’s CEO and other top-level
Directors managers
Affiliated Outsiders
• Individuals not involved with day-to-
day operations, but who have a
relationship with the company
Independent Outsiders
• Individuals who are independent of the
firm’s day-to-day operations and other
relationships
9
10. Governance Mechanisms
Board of Role of the Board of Directors
Directors
• Monitor – Are managers acting in
shareholders best interests
• Evaluate & Influence – examine
proposals, decisions actions, provide
feedback and offer direction
• Initiate & Determine – delineate
corporate mission, specify strategic
options, make decisions
10
11. Governance Mechanisms
• Salary, bonuses, long term incentive
Board of compensation
Directors • Executive decisions are complex and
non-routine
Executive • Many factors intervene making it
Compensation difficult to establish how managerial
decisions are directly responsible for
outcomes
11
12. Governance Mechanisms
• Stock ownership (long-term
Board of incentive compensation) makes
Directors managers more susceptible to
market changes which are partially
Executive beyond their control
Compensation • Incentive systems do not guarantee
that managers make the “right”
decisions, but do increase the
likelihood that managers will do the
things for which they are rewarded
12
13. CEO Pay and Performance
Classic pay for
performance
relationship
Unfortunately, this
CEO Pay
relationship is weak
The stronger
relationship is with
firm size
Firm Performance
13
14. CEO Pay and Firm Size
Relationship between
pay and firm size is
curvilinear.
CEO pay increases at
CEO Pay a decreasing rate
Firm Size
14
15. Relationship Between Firm performance
and Firm Size
Relationship between
firm performance and
firm size is curvilinear.
Performance
Beyond some point, as
size increases, firm
performance declines
Firm
BUT…
From the graph of CEO
pay vs. firm size, pay
doesn’t decline
Firm Size
15
16. Relationship Between Firm performance
and Equity Ownership
Relationship between
firm performance
(Tobin’s Q) and
managerial ownership
is curvilinear.
Firm Value
Beyond some point, as
ownership increases,
firm value declines
Managerial Ownership in %
16
17. Governance Mechanisms
• Large block shareholders (often
Board of institutional owners) have a strong
Directors incentive to monitor management
closely
Executive
Compensation • Exit vs. Voice – Cannot costlessly exit
due to equity stake (transaction costs)
so they press for change (exercise
Ownership voice)
Concentration
• They may also obtain Board seats
which enhances their ability to monitor
effectively (although financial
institutions are legally forbidden from
directly holding board seats)
17
18. Governance Mechanisms
• Types of institutional investors
Board of - Mutual funds, pension funds,
Directors foundations, churches, universities,
insurance companies
Executive
Compensation • Pressure-resistant versus pressure-
sensitive
Ownership - Mutual and pension funds are
Concentration pressure resistant
• Are Institutional investors the same?
- Short vs. long term
• Components of voice:
- Pension fund hit lists
- Shareholder liability suits
- Investor alliances
- Proxy contests 18
19. Governance Mechanisms
• Firms face the risk of takeover
Board of when they are operated inefficiently
Directors • Many firms begin to operate more
efficiently as a result of the “threat”
Executive of takeover, even though the actual
Compensation incidence of hostile takeovers is
relatively small
Ownership • Changes in regulations have made
Concentration hostile takeovers difficult
• Acts as an important source of
Market for discipline over managerial
Corporate Control incompetence and waste
19
20. Managerial Defense Tactics
Designed to fend off the takeover attempt
Increase the costs of making the acquisitions
Causes incumbent management to become
entrenched while reducing the chances of
introducing a new management team
May require asset restructuring
Institutional investors oppose the use of defense
tactics
20
How to increase product diversification and how to intensify effort to innovate without increased agency problems? Firms undertake a variety of actions to reduce risk through diversification, including entering diverse lines of business, joining alliances, taking on temporary partners, and outsource risky projects, including R&D. The challenge, as explained in the book, is that shareholders do not directly benefit from risk-reducing diversification strategies when they can replicate this diversification on their own. Diversification, therefore, is often seen as managers’ opportunistic pursuit of their own self-interests at the expense of the shareholders who can, if they so desire, diversify their individual portfolios simply by buying shares in other companies. While this view reflects the influence of agency theory, recently such views have been challenged by stewardship theory (Donaldson, 1990a; Donaldson & Davis, 1991), a framework presuming that managers are actually seeking to maximize organizational performance. For instance, one reason for diversifying would be to enhance company profit and growth prospects by reducing dependence on static or declining products, markets, and even industries. In the parlance of the I/O model discussed in Chapter 1, such motive might lead companies to increase diversification into technologies or industries where profit rates are increasing most and to those where the competitive dynamism is relatively more stable. Managers might also opt to diversify for earnings stability and economies of scale. In short, diversification strategies might represent opportunism, but it might also reflect management rational and genuine response to financial adversity and/or the need for improved financial performance for their company.
Continued from previous page Interestingly, over the past decade the world’s leading private equity firms consistently have delivered internal rates of return twice as large as the S&P 500’s. They’ve achieved this is by adding value to the underlying operations (Rogers, Holland, & Haas, 2002). For example, private equity firms: a) clearly define their investment thesis and its time frame to fruition; b) hire managers who act like owners; c) focus on a few measures of success that all employees understand d) make capital work hard or otherwise re-deploy under-performing assets quickly e) make the center an active shareholder. Can institutional owners understand and act like managers of private equity firms?
Continued from previous page Interestingly, over the past decade the world’s leading private equity firms consistently have delivered internal rates of return twice as large as the S&P 500’s. They’ve achieved this is by adding value to the underlying operations (Rogers, Holland, & Haas, 2002). For example, private equity firms: a) clearly define their investment thesis and its time frame to fruition; b) hire managers who act like owners; c) focus on a few measures of success that all employees understand d) make capital work hard or otherwise re-deploy under-performing assets quickly e) make the center an active shareholder. Can institutional owners understand and act like managers of private equity firms?
Continued from previous page Recently, Phan and his colleagues (2002) explained the relationships between corporate governance and innovation—R&D expenditures, patents, and new products—in 86 publicly listed pharmaceutical firms. Consistent with agency theory, they found that the presence of large block private and institutional shareholders—controlling for firm size and performance—positively influenced innovation. They demonstrated that CEO duality was positively related to R&D expenditures, and that boards with more insiders were positively associated with the number of new products. In short, in the highly turbulent pharmaceutical industry, where risky decisions have to be made under substantial uncertainty, active ownership, unitary command structures, and strategically involved boards provide superior explanatory power for the governance—innovation link. Table 11.3 The Best and Worst Boards of Directors In 2002 http://www.businessweek.com/pdfs/boards.pdf Business Week’s special report on corporate governance: The best and the worst boards http://www.businessweek.com/1997/49/b3556001.htm