The document discusses corporate ownership and governance. It notes that while shareholders are often considered owners of corporations, in reality no one truly owns the corporation as it is a separate legal entity. Shareholders have limited rights and their focus is often short-term gains rather than long-term corporate interests. This can put the interests of other stakeholders like employees at risk. The document argues for a balanced approach between shareholders and other stakeholders in corporate decision-making.
17 rights and_privileges_of_shareholdersMark Anders
The document discusses the rights and privileges of shareholders in a company. It outlines several key rights including the right to obtain company documents, transfer shares, attend general meetings, vote, receive dividends, inspect meeting minutes, and participate in director elections. It also discusses how strong investor protections are important for effective corporate governance and can help reduce agency costs by aligning manager and shareholder objectives.
This document provides a brief history of corporate governance as a field of study. It discusses how corporate governance has existed as long as companies have, but it emerged as a distinct field of study less than 70 years ago. Over the last 40 years, there has been significant activity in this field including numerous codes, reports, laws, and research. The document also outlines some major corporate scandals and wrongdoings in countries like the US, UK, and Pakistan. It then discusses various reports and principles that helped shape modern corporate governance standards and regulations, such as the Cadbury Report, OECD Principles, and Sarbanes-Oxley Act. Finally, it notes there are two perspectives on corporate governance - issues in western
The following presentation takes you through the Corporate Governance norms as prescribed by SEBI with a bit of detail into some major Corporate governance scams in INDIA
The document discusses the rights of shareholders in corporate governance. It outlines several key rights including:
- The right to attend annual general meetings and vote on major issues affecting the company.
- The right to transfer ownership of shares to other parties.
- The entitlement to receive dividends from company profits.
- The opportunity to inspect corporate books and records.
- The ability to sue directors for wrongful acts through shareholder class action or derivative lawsuits.
- Statutory rights provided under the Companies Act and OECD principles to protect shareholder interests and promote transparency and equitable treatment.
This document summarizes the Sarbanes-Oxley Act of 2002, which aimed to reform corporate governance and enhance financial disclosures. It discusses the major elements and titles of the act, including establishing the Public Company Accounting Oversight Board, increasing auditor independence, enhancing corporate responsibility and financial disclosures, and increasing penalties for white collar crimes and fraud. Key sections are also summarized, such as sections related to internal controls, off-balance sheet items, assessing internal controls, financial disclosures, criminal penalties, and CEO/CFO certification of financial reports.
The Very Basics: Forming the Business (Series: The Start-Up/Forming the Busin...Financial Poise
So, you are an entrepreneur and want to start your own business (or you are an attorney, accountant, or other professional advisor working with one). One of the first decisions required is to choose a legal structure for the business and the jurisdiction of entity organization. What factors should be taken into consideration prior to selecting a legal structure and jurisdiction? Does a sole proprietorship, partnership, limited liability company or corporation (C- or S-corp) make the most sense? This webinar focuses on business formation and the pros and cons to the different legal structures, and includes tips on how to keep one’s personal assets safe from the claims of future creditors of the business.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/the-very-basics-forming-the-business-2021/
The document discusses issues with Vietnam's legal framework on corporate governance and makes recommendations for improvement. It addresses unclear provisions around how owners of single-member LLCs exercise power, the scope of authorization of members' councils, an LLC director's authorization authority, and lack of rules around liabilities of shadow directors and de facto directors. Clarifying these areas of law would help create a stronger, more transparent legal framework and reduce risks for investors in Vietnam.
The document discusses corporate ownership and governance. It notes that while shareholders are often considered owners of corporations, in reality no one truly owns the corporation as it is a separate legal entity. Shareholders have limited rights and their focus is often short-term gains rather than long-term corporate interests. This can put the interests of other stakeholders like employees at risk. The document argues for a balanced approach between shareholders and other stakeholders in corporate decision-making.
17 rights and_privileges_of_shareholdersMark Anders
The document discusses the rights and privileges of shareholders in a company. It outlines several key rights including the right to obtain company documents, transfer shares, attend general meetings, vote, receive dividends, inspect meeting minutes, and participate in director elections. It also discusses how strong investor protections are important for effective corporate governance and can help reduce agency costs by aligning manager and shareholder objectives.
This document provides a brief history of corporate governance as a field of study. It discusses how corporate governance has existed as long as companies have, but it emerged as a distinct field of study less than 70 years ago. Over the last 40 years, there has been significant activity in this field including numerous codes, reports, laws, and research. The document also outlines some major corporate scandals and wrongdoings in countries like the US, UK, and Pakistan. It then discusses various reports and principles that helped shape modern corporate governance standards and regulations, such as the Cadbury Report, OECD Principles, and Sarbanes-Oxley Act. Finally, it notes there are two perspectives on corporate governance - issues in western
The following presentation takes you through the Corporate Governance norms as prescribed by SEBI with a bit of detail into some major Corporate governance scams in INDIA
The document discusses the rights of shareholders in corporate governance. It outlines several key rights including:
- The right to attend annual general meetings and vote on major issues affecting the company.
- The right to transfer ownership of shares to other parties.
- The entitlement to receive dividends from company profits.
- The opportunity to inspect corporate books and records.
- The ability to sue directors for wrongful acts through shareholder class action or derivative lawsuits.
- Statutory rights provided under the Companies Act and OECD principles to protect shareholder interests and promote transparency and equitable treatment.
This document summarizes the Sarbanes-Oxley Act of 2002, which aimed to reform corporate governance and enhance financial disclosures. It discusses the major elements and titles of the act, including establishing the Public Company Accounting Oversight Board, increasing auditor independence, enhancing corporate responsibility and financial disclosures, and increasing penalties for white collar crimes and fraud. Key sections are also summarized, such as sections related to internal controls, off-balance sheet items, assessing internal controls, financial disclosures, criminal penalties, and CEO/CFO certification of financial reports.
The Very Basics: Forming the Business (Series: The Start-Up/Forming the Busin...Financial Poise
So, you are an entrepreneur and want to start your own business (or you are an attorney, accountant, or other professional advisor working with one). One of the first decisions required is to choose a legal structure for the business and the jurisdiction of entity organization. What factors should be taken into consideration prior to selecting a legal structure and jurisdiction? Does a sole proprietorship, partnership, limited liability company or corporation (C- or S-corp) make the most sense? This webinar focuses on business formation and the pros and cons to the different legal structures, and includes tips on how to keep one’s personal assets safe from the claims of future creditors of the business.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/the-very-basics-forming-the-business-2021/
The document discusses issues with Vietnam's legal framework on corporate governance and makes recommendations for improvement. It addresses unclear provisions around how owners of single-member LLCs exercise power, the scope of authorization of members' councils, an LLC director's authorization authority, and lack of rules around liabilities of shadow directors and de facto directors. Clarifying these areas of law would help create a stronger, more transparent legal framework and reduce risks for investors in Vietnam.
Corporate governance is the system by which companies are directed and controlled. It specifies how power is distributed among shareholders, directors, and management. It also specifies the rules and procedures for making decisions on corporate affairs and structures the company's goals. The key principles of corporate governance are rights of shareholders, accountability, disclosure, integrity, and interest of stakeholders. SEBI issued a code of corporate governance for listed companies in India to improve standards. It covers requirements for boards, audit committees, disclosure, and shareholders.
This document outlines corporate governance requirements for banks and bank controlling companies in South Africa. It discusses key principles of corporate governance from international and local standards. The Banks Act and regulations establish specific governance duties for bank directors and executive officers, including fiduciary duties to act in good faith and avoid conflicts of interest. The BA 020 declaration requires extensive personal and professional information from prospective and current directors and officers to assess their fitness and propriety.
External Linits on ESOPs Special Considerations for Professional Corporations...Christopher T. Horner II
This document provides an overview of legal considerations for leveraged ESOP transactions involving professional corporations across several states. It summarizes state laws governing share ownership in professional corporations from Virginia, Maryland, North Carolina, and South Carolina. Key takeaways are that professional corporations can sponsor ESOPs in these states but state laws restrict share ownership to licensed professionals. The document also outlines the basic structure of a leveraged ESOP transaction and relevant ERISA and tax code provisions.
This document provides an overview of key concepts in corporate governance, including:
- The five main theories of corporate governance: special interest group control, governmental control, independent director control, managerial control, and shareholder democracy.
- The roles and responsibilities of directors, officers, and shareholders. Directors manage the corporation, officers operate it, and shareholders own it.
- Shareholder rights like examining records, receiving dividends, transferring shares, and preemptive rights to purchase new stock offerings.
- Laws and rules governing management responsibilities, like the business judgment rule, fairness rule, and Sarbanes-Oxley Act requiring directors to monitor legal compliance.
Corporate governance and financial reporting disclosuresAlexander Decker
This article examines the influence of corporate governance on corporate financial reporting disclosures in Bangladesh. The researchers measured the overall disclosure index of 20 non-financial companies and found that corporate governance is significantly associated with the extent of financial reporting disclosures. In particular, external auditors, multi-listing status, and profitability were significantly associated with higher overall financial reporting disclosures. The article argues that improving corporate governance practices, such as strengthening board oversight and external controls, can help enhance the reliability of financial reporting and restore investor confidence in Bangladesh's volatile capital markets.
‘Company Secretary’The Professional Facilitator in Capital MarketPavan Kumar Vijay
Company Secretaries play an important role in India's growing capital markets. They serve as strategic advisors to listed companies, intermediaries like merchant bankers, and help guide companies through important processes like IPOs, mergers and acquisitions. As regulations have increased, the role of Company Secretaries has expanded, with opportunities in employment with companies and intermediaries or in private practice providing compliance and advisory services. The capital markets have grown significantly over time and Company Secretaries are well positioned to support further development and help companies and investors navigate an increasingly complex regulatory landscape.
The document discusses the evolution of the securities market in India from 1998-1999 to 2007-2008. It notes that during this period, the Sensex rose significantly, regulations became stricter, and the market became more developed and globalized. It then provides an overview of the key intermediaries in the Indian securities market, such as merchant bankers, brokers, depositories and others. Finally, it discusses the role of a Company Secretary in navigating corporate governance and compliance in this complex market.
This document discusses corporate governance in India. It begins by providing context on the state of corporate governance in India prior to reforms, noting issues like managing agency systems, licensing requirements, corruption, and ineffective oversight. It then discusses current weaknesses in corporate governance in India, including related party transactions, board independence, and enforcement. The document concludes by recommending improvements like increasing board independence, separating CEO and chairperson roles, strengthening shareholder rights and enforcement, and improving transparency and disclosure.
Corporate Governance in India & SEBI RegulationsAtif Ghayas
This document discusses corporate governance in India and regulations from the Securities Exchange Board of India (SEBI). It defines corporate governance and outlines its key principles and objectives. It also discusses SEBI's role in establishing standards and protecting investors following scandals. The largest example discussed is the Satyam scandal, where the CEO confessed to overstating profits by billions through fake accounts and invoices.
The document discusses the Sarbanes-Oxley Act (SOX) passed in 2002 in response to several major corporate accounting scandals. SOX aimed to restore confidence by requiring stricter financial disclosures, independent audits of internal controls, corporate fraud accountability, and protections for whistleblowers. Key aspects of SOX include CEO/CFO certification of financial reports, management assessment of internal controls, auditor oversight, and analysis of potential conflicts of interest for securities analysts.
Corporate Governance under the Provisions of the Companies Act, 2013ijtsrd
The document discusses corporate governance under the provisions of the Companies Act 2013 in India. Some key points:
- The Companies Act 2013 aims to improve corporate governance, simplify regulations, and protect minority shareholders. It places more responsibilities on independent directors and board of directors.
- It requires at least one woman director, minimum number of independent directors, limits on number of directorships a person can hold, and duties and liabilities of directors.
- It introduces concepts like mandatory committees, related party transactions disclosure, and corporate social responsibility reporting. The objective is to increase transparency and accountability in companies.
This document discusses the role of shareholders in corporate restructuring. It examines how shareholders can articulate dissent during restructuring that fundamentally changes the company structure, such as mergers or changes in share capital. The document analyzes legal mechanisms for shareholders to voice opposition or exit the company if they disagree with restructuring plans. It also discusses court scrutiny of restructuring schemes to ensure they are fair and not oppressive to minority shareholders. Overall, the document evaluates how laws and courts protect shareholder interests during corporate restructuring.
Chp6 The Role of Institutional Investors in Corporate GovernanceSunLy Gui
Institutional investors such as pension funds and insurance companies have become the dominant shareholders in many countries over the past several decades as individual share ownership has declined. This shift has increased the influence of institutional investors in corporate governance. Several influential corporate governance reports and principles in countries like the UK and US have emphasized the important role of institutional investors in using their ownership stakes to ensure companies follow best practices in governance, for example by engaging in dialogue with companies and using their shareholder voting rights. The growing dominance of institutional investors is seen as an important factor affecting corporate governance standards globally.
The Satyam scandal exposed major governance failures. Raju inflated cash balances and profits through fake records. While regulators, auditors, and directors failed to prevent the fraud, some responsibility also lies with management. In response, laws and regulations were strengthened in India regarding auditing, disclosures, and board independence to bolster corporate governance. However, regulations alone cannot ensure integrity, which depends more on management commitment and culture.
This document discusses various types of corporate restructuring such as mergers, demergers, and reduction of capital. It outlines the regulatory framework and listing requirements for such transactions. It also provides examples of restructuring strategies that listed companies can pursue, such as direct listings, increasing promoter holdings, acquiring other listed companies, and increasing resources without raising additional capital. Overall, the document presents corporate restructuring as a strategic tool for companies to grow, add shareholder value, and unlock their full potential.
Legal Issues Presentation at Aging2.0 San Francisco Chapter- September 19, 2018Brittany Weinberg
This document summarizes key legal issues for start-up entrepreneurs. It discusses entity choice, noting that C-corps are taxed twice but allow preferred stock, while S-corps and LLCs avoid double taxation but cannot issue preferred stock. It recommends forming as a Delaware C-corp for its established corporate law and streamlined process. The document also covers fundraising options like preferred stock, convertible debt, and convertible equity, noting potential pitfalls like differing valuation caps. Finally, it introduces B-corps and benefit corporations as options that allow consideration of social and environmental impacts.
The document discusses the terms of reference for the HIH and Banking Royal Commissions and compares their focus on governance issues, potential legal contraventions, performance of regulatory agencies, and policy development. It also provides background on the HIH failure, including its business profile, reasons for collapse relating to financial and governance issues, and consequences. Finally, it discusses ongoing corporate failures and debates around increasing regulation versus focusing on fiduciary duties and accountability.
This document discusses corporate governance in India and SEBI regulations. It defines corporate governance and outlines corporate governance norms. It describes how corporate governance has evolved in India, the role of the Securities and Exchange Board of India (SEBI) in implementing regulations like Clause 49, and the major changes Clause 49 introduced around board independence, disclosures, and other matters. The conclusion states that as Indian companies compete globally, adhering to world-class corporate governance standards has become essential.
Law and Regulations for Private and Retail Banking (Asia-Pacific, Hong Kong),...Raul A. Lujan Anaya
Notes on Certificate Course (Postgrad.) in Banking, Corporate and Finance Law: Law and Regulations for Private and Retail Banking (Hong Kong, Asia-Pacific), in the University of Hong Kong, First Semester of 2014.
The document discusses corporate debt restructuring, which involves reorganizing a company's outstanding debt obligations to reduce the burden on the company. This allows the company to increase its ability to meet obligations and avoid bankruptcy. The process typically involves negotiations between the company and creditors to decrease interest rates, extend payment timelines, or forgive some debt in exchange for equity. It describes the steps in evaluating a company's financial situation, negotiating an agreement with creditors, potentially liquidating some assets, and formally restructuring the debt obligations through a signed contract.
Corporate governance is the system by which companies are directed and controlled. It specifies how power is distributed among shareholders, directors, and management. It also specifies the rules and procedures for making decisions on corporate affairs and structures the company's goals. The key principles of corporate governance are rights of shareholders, accountability, disclosure, integrity, and interest of stakeholders. SEBI issued a code of corporate governance for listed companies in India to improve standards. It covers requirements for boards, audit committees, disclosure, and shareholders.
This document outlines corporate governance requirements for banks and bank controlling companies in South Africa. It discusses key principles of corporate governance from international and local standards. The Banks Act and regulations establish specific governance duties for bank directors and executive officers, including fiduciary duties to act in good faith and avoid conflicts of interest. The BA 020 declaration requires extensive personal and professional information from prospective and current directors and officers to assess their fitness and propriety.
External Linits on ESOPs Special Considerations for Professional Corporations...Christopher T. Horner II
This document provides an overview of legal considerations for leveraged ESOP transactions involving professional corporations across several states. It summarizes state laws governing share ownership in professional corporations from Virginia, Maryland, North Carolina, and South Carolina. Key takeaways are that professional corporations can sponsor ESOPs in these states but state laws restrict share ownership to licensed professionals. The document also outlines the basic structure of a leveraged ESOP transaction and relevant ERISA and tax code provisions.
This document provides an overview of key concepts in corporate governance, including:
- The five main theories of corporate governance: special interest group control, governmental control, independent director control, managerial control, and shareholder democracy.
- The roles and responsibilities of directors, officers, and shareholders. Directors manage the corporation, officers operate it, and shareholders own it.
- Shareholder rights like examining records, receiving dividends, transferring shares, and preemptive rights to purchase new stock offerings.
- Laws and rules governing management responsibilities, like the business judgment rule, fairness rule, and Sarbanes-Oxley Act requiring directors to monitor legal compliance.
Corporate governance and financial reporting disclosuresAlexander Decker
This article examines the influence of corporate governance on corporate financial reporting disclosures in Bangladesh. The researchers measured the overall disclosure index of 20 non-financial companies and found that corporate governance is significantly associated with the extent of financial reporting disclosures. In particular, external auditors, multi-listing status, and profitability were significantly associated with higher overall financial reporting disclosures. The article argues that improving corporate governance practices, such as strengthening board oversight and external controls, can help enhance the reliability of financial reporting and restore investor confidence in Bangladesh's volatile capital markets.
‘Company Secretary’The Professional Facilitator in Capital MarketPavan Kumar Vijay
Company Secretaries play an important role in India's growing capital markets. They serve as strategic advisors to listed companies, intermediaries like merchant bankers, and help guide companies through important processes like IPOs, mergers and acquisitions. As regulations have increased, the role of Company Secretaries has expanded, with opportunities in employment with companies and intermediaries or in private practice providing compliance and advisory services. The capital markets have grown significantly over time and Company Secretaries are well positioned to support further development and help companies and investors navigate an increasingly complex regulatory landscape.
The document discusses the evolution of the securities market in India from 1998-1999 to 2007-2008. It notes that during this period, the Sensex rose significantly, regulations became stricter, and the market became more developed and globalized. It then provides an overview of the key intermediaries in the Indian securities market, such as merchant bankers, brokers, depositories and others. Finally, it discusses the role of a Company Secretary in navigating corporate governance and compliance in this complex market.
This document discusses corporate governance in India. It begins by providing context on the state of corporate governance in India prior to reforms, noting issues like managing agency systems, licensing requirements, corruption, and ineffective oversight. It then discusses current weaknesses in corporate governance in India, including related party transactions, board independence, and enforcement. The document concludes by recommending improvements like increasing board independence, separating CEO and chairperson roles, strengthening shareholder rights and enforcement, and improving transparency and disclosure.
Corporate Governance in India & SEBI RegulationsAtif Ghayas
This document discusses corporate governance in India and regulations from the Securities Exchange Board of India (SEBI). It defines corporate governance and outlines its key principles and objectives. It also discusses SEBI's role in establishing standards and protecting investors following scandals. The largest example discussed is the Satyam scandal, where the CEO confessed to overstating profits by billions through fake accounts and invoices.
The document discusses the Sarbanes-Oxley Act (SOX) passed in 2002 in response to several major corporate accounting scandals. SOX aimed to restore confidence by requiring stricter financial disclosures, independent audits of internal controls, corporate fraud accountability, and protections for whistleblowers. Key aspects of SOX include CEO/CFO certification of financial reports, management assessment of internal controls, auditor oversight, and analysis of potential conflicts of interest for securities analysts.
Corporate Governance under the Provisions of the Companies Act, 2013ijtsrd
The document discusses corporate governance under the provisions of the Companies Act 2013 in India. Some key points:
- The Companies Act 2013 aims to improve corporate governance, simplify regulations, and protect minority shareholders. It places more responsibilities on independent directors and board of directors.
- It requires at least one woman director, minimum number of independent directors, limits on number of directorships a person can hold, and duties and liabilities of directors.
- It introduces concepts like mandatory committees, related party transactions disclosure, and corporate social responsibility reporting. The objective is to increase transparency and accountability in companies.
This document discusses the role of shareholders in corporate restructuring. It examines how shareholders can articulate dissent during restructuring that fundamentally changes the company structure, such as mergers or changes in share capital. The document analyzes legal mechanisms for shareholders to voice opposition or exit the company if they disagree with restructuring plans. It also discusses court scrutiny of restructuring schemes to ensure they are fair and not oppressive to minority shareholders. Overall, the document evaluates how laws and courts protect shareholder interests during corporate restructuring.
Chp6 The Role of Institutional Investors in Corporate GovernanceSunLy Gui
Institutional investors such as pension funds and insurance companies have become the dominant shareholders in many countries over the past several decades as individual share ownership has declined. This shift has increased the influence of institutional investors in corporate governance. Several influential corporate governance reports and principles in countries like the UK and US have emphasized the important role of institutional investors in using their ownership stakes to ensure companies follow best practices in governance, for example by engaging in dialogue with companies and using their shareholder voting rights. The growing dominance of institutional investors is seen as an important factor affecting corporate governance standards globally.
The Satyam scandal exposed major governance failures. Raju inflated cash balances and profits through fake records. While regulators, auditors, and directors failed to prevent the fraud, some responsibility also lies with management. In response, laws and regulations were strengthened in India regarding auditing, disclosures, and board independence to bolster corporate governance. However, regulations alone cannot ensure integrity, which depends more on management commitment and culture.
This document discusses various types of corporate restructuring such as mergers, demergers, and reduction of capital. It outlines the regulatory framework and listing requirements for such transactions. It also provides examples of restructuring strategies that listed companies can pursue, such as direct listings, increasing promoter holdings, acquiring other listed companies, and increasing resources without raising additional capital. Overall, the document presents corporate restructuring as a strategic tool for companies to grow, add shareholder value, and unlock their full potential.
Legal Issues Presentation at Aging2.0 San Francisco Chapter- September 19, 2018Brittany Weinberg
This document summarizes key legal issues for start-up entrepreneurs. It discusses entity choice, noting that C-corps are taxed twice but allow preferred stock, while S-corps and LLCs avoid double taxation but cannot issue preferred stock. It recommends forming as a Delaware C-corp for its established corporate law and streamlined process. The document also covers fundraising options like preferred stock, convertible debt, and convertible equity, noting potential pitfalls like differing valuation caps. Finally, it introduces B-corps and benefit corporations as options that allow consideration of social and environmental impacts.
The document discusses the terms of reference for the HIH and Banking Royal Commissions and compares their focus on governance issues, potential legal contraventions, performance of regulatory agencies, and policy development. It also provides background on the HIH failure, including its business profile, reasons for collapse relating to financial and governance issues, and consequences. Finally, it discusses ongoing corporate failures and debates around increasing regulation versus focusing on fiduciary duties and accountability.
This document discusses corporate governance in India and SEBI regulations. It defines corporate governance and outlines corporate governance norms. It describes how corporate governance has evolved in India, the role of the Securities and Exchange Board of India (SEBI) in implementing regulations like Clause 49, and the major changes Clause 49 introduced around board independence, disclosures, and other matters. The conclusion states that as Indian companies compete globally, adhering to world-class corporate governance standards has become essential.
Law and Regulations for Private and Retail Banking (Asia-Pacific, Hong Kong),...Raul A. Lujan Anaya
Notes on Certificate Course (Postgrad.) in Banking, Corporate and Finance Law: Law and Regulations for Private and Retail Banking (Hong Kong, Asia-Pacific), in the University of Hong Kong, First Semester of 2014.
The document discusses corporate debt restructuring, which involves reorganizing a company's outstanding debt obligations to reduce the burden on the company. This allows the company to increase its ability to meet obligations and avoid bankruptcy. The process typically involves negotiations between the company and creditors to decrease interest rates, extend payment timelines, or forgive some debt in exchange for equity. It describes the steps in evaluating a company's financial situation, negotiating an agreement with creditors, potentially liquidating some assets, and formally restructuring the debt obligations through a signed contract.
What is Corporate Debt Restructuring, how can it be done and what are the rules and guidelines for CDR? Read this Research Report from Resurgent India to know everything about Corporate Debt Restructuring.
The document discusses reforms to Malaysia's corporate insolvency regime. It notes international trends moving towards corporate rescue mechanisms rather than just liquidation. The current regime focuses on liquidation and lacks rescue mechanisms. It examines approaches taken in other countries and whether Malaysia should have a single omnibus insolvency act. Key areas for reform include commencement/termination of winding up processes, liquidator powers and duties, qualifications, treatment of secured creditors, and voidable transactions. The review aims to balance facilitation of winding up with protecting creditor/shareholder rights while establishing rescue mechanisms.
This document discusses key concepts around corporate governance including definitions, principles, and roles. It defines corporate governance as the system by which companies are directed and controlled, involving transparency, accountability, and stakeholder interests. It outlines the OECD principles of protecting shareholder rights, equitable treatment, recognizing stakeholder roles, disclosure, and board responsibilities. It also summarizes the roles of shareholders in electing directors and monitoring management, and the functions of boards of directors in strategic planning, risk management, and oversight.
This document provides an overview of organizational structures and types of business organizations. It discusses the key characteristics and advantages/disadvantages of sole proprietorships, partnerships, corporations, limited liability companies, and other structures. Specifically, it outlines the defining features of general partnerships, limited partnerships, corporations, and limited liability companies. It also provides an example case study on Toyota's product recalls due to unintended acceleration issues and discusses how Japanese corporate governance norms may have contributed to Toyota's crisis response challenges.
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Chapter1B) Describe the organizational forms a company might h.docxchristinemaritza
Chapter1
B) Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.
There is three principal form of organization.
· Proprietorship: Which is an unincorporated business owned by one individual.
· Partnership: Exists whenever two or more persons or entities associate to conduct a noncorporate business for profit.
The Proprietorship and Partnership have a similar advantage and disadvantage.
Advantage:
1) It has an easy process and not expensive formed.
2) The government regulations for these forms are few.
3) The Income is not subject to corporate tax but is treated as part of proprietor's personal income.
Disadvantages:
1) It could be difficult for the proprietor's in these kind of form to obtained the capital need to growth.
2) The proprietor and the partners are liable for the company’s liabilities, which can affect their personal property. Regarding partnership, they could avoid that by the limited partner so one will be a general partner and have unlimited liability, and returns. The second one will be a limited partner and have limited liability, and returns.
3) The life of the company in case of proprietorship is limited to the life of its founder.
4) Some times a problem could appear between the partners.
· Corporation: A legal entity created under state laws, and it is separate and distinct from its owners and managers.
Corporation’s advantages:
1) The corporation has an unlimited life and its separate from its owners and managers.
2) The transfer of ownership interests is easier than the Proprietorship and Partnership.
3) It has a limited liability up to the amount invested in the organization.
4) It is relatively easy for a corporation to get capital markets for its growth plans.
Corporation’s disadvantages:
1- A corporation is subject to double taxation system. Therefore, it is subject to a corporation tax and earnings paid out as dividends to its shareholders are taxable as income of the shareholders.
2- complex and time-consuming set of regulations as compared to partnerships and proprietorship. That need to prepare the charter and the bylaws.
D) What should be the primary objective of managers?
The primary objective of managers is stock holder wealth maximization.
1- Do firms have any responsibilities to society at large?
Companies should operate regarding their manager’s concern as well as their employees benefit and good work environment including laws and rules, also act in an ethical manner and the good for their communities and society.
2- Is stock price maximization good or bad for society?
It’s good because of three reasons:
a) When managers take an action that maximizes the stock price that will improve the quality of life for ordinary citizens.
b) Consumer benefit because stock price maximization needs efficient and low-cost business that produces high-quality products and services at low costs.
c) Employees ...
This document provides an overview of corporate governance principles and practices. It begins with introducing the origin and meaning of corporate governance, highlighting key corporate failures in the 1990s and 2000s that triggered the modern corporate governance movement. It then outlines the various parties and mechanisms involved in corporate governance. The rest of the document details the definition, benefits, elements, legal framework and challenges of corporate governance in Nigeria.
BGS-Module 2-Corporate Governance and CSR.pptxvijay312820
Corporate governance refers to the system and processes by which companies are directed and controlled. It establishes accountability, oversight and transparency of a corporation's management and board of directors to its stakeholders such as shareholders, creditors, auditors and regulators. Effective corporate governance helps ensure the efficient functioning of companies and markets. It becomes increasingly important due to changing ownership structures, a focus on social responsibility and the growing number of corporate scams.
The document discusses corporate governance and research methodology. It defines corporate governance and discusses its key stakeholders. The objectives of the research are outlined, which are to analyze corporate governance practices of BSE-30 companies over 5 years and evaluate the importance of corporate governance from investors' and company secretaries' viewpoints. The research methodology discusses the population, sample size, sampling method, and data sources for the research.
Corporate governance and the role of professionals under the Companies Act, 2...D Murali ☆
Corporate governance and the role of professionals under the Companies Act, 2013- Dr S. Chandrasekaran - Article published in Business Advisor, dated July 25, 2016 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
This document discusses various topics related to business ventures including reasons for business failure, types of business ownership, identifying sick businesses, the importance of MSMEs, bankruptcy and liquidation, winding up companies, reviving sick companies, and exit strategies for entrepreneurs. Specifically, it outlines five common reasons for business failure and five precautions business owners can take to avoid failure. It also defines bankruptcy as a legal process providing debt relief and liquidation as ending a business and distributing assets to pay creditors.
The Corporate Debt Restructuring (CDR) mechanism in India has a three-tier structure to help restructure corporate debt for viable companies facing financial problems. The CDR Standing Forum and its Core Group lay down policies, while the CDR Empowered Group, consisting of executives from participating financial institutions, considers restructuring proposals from the CDR Cell. If a proposal is deemed feasible, the CDR Cell then works with lenders to develop a detailed restructuring plan within set timeframes for approval by the Empowered Group. The goal of CDR is to provide a timely, transparent process to restructure debt outside of legal proceedings for the benefit of all parties involved.
The document discusses restructuring the debts of Dhandapani Finance Limited (DFL), a non-banking financial company in India. DFL's financial position deteriorated due to external factors like the global recession affecting its business. Its debts were proposed for restructuring under the Corporate Debt Restructuring mechanism. The restructuring considered DFL's future outlook and viability. A cash flow statement projected repayment over five years at 15% interest, with assumptions about new customers, loan sizes, defaults, non-performing assets and provisions. The restructuring aimed to minimize losses for creditors and support DFL's continuing operations.
What Every Founder/Entrepeneur Must Know (Series: The Start-Up/Small Business...Financial Poise
Congratulations. You are a founder of a company and you have just been given an hour to ask several experts anything you want about the subject. Some questions will certainly focus on IP, since intellectual property is so important to so many businesses. Some questions will touch on outsourcing- perhaps of manufacturing, perhaps of certain other functions. Formation, capital raising, and HR are also fair game. And since the panel includes two attorneys, you can be sure that the conversation will cover both the business and legal aspects of the various topics discussed. The panel will also discuss planning for incremental growth; and, while pandemic continues, the availability of PPP loans and governmental assistance.
To view the accompanying webinar, go to:https://www.financialpoise.com/financial-poise-webinars/what-every-founder-entrepreneur-must-know-2021/
This document contains the agenda for a corporate governance lecture and discussion. It includes:
- An overview of key corporate governance concepts like the board of directors, shareholders, management, theories of corporate governance, and principles of good governance.
- A discussion of an ethical dilemma related to corporate governance.
- An explanation of a mind map created about the lecture topics.
- Plans to discuss ethical issues in the news related to corporations.
The document provides an agenda and overview of topics to be covered related to corporate governance, including definitions of key terms and concepts, as well as plans for group work and discussion of real-world ethical dilemmas.
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Governance in the Spotlight: What the
Sarbanes-Oxley Act Means for You
F
ollowing a wave of high-profile corporate business and
governance scandals, Congress passed the Public
Company Accounting Reform & Investor Protection Act
of 2002 (Public Law 107-240), better known as the Sarbanes-
Oxley Act. This legislation contains the most sweeping and
comprehensive set of public-company
governance, financial and accounting
reforms enacted in more than 30 years.
The Sarbanes-Oxley Act, intended to
protect investors and renew public trust in
corporations and their boards, set the stage
for even broader reforms promulgated by
the stock exchanges and other business
and investor protection groups.
These emerging requirements and
standards are widely perceived as
governance "best practices" for both for-
profit and not-for-profit organizations
alike. Attorneys, consultants and
governance experts agree that it is only a
matter of time before the Sarbanes
legislation and the rules and regulations
designed to implement it. will be broadly
applied to not-for-profit governance and
used as the yardstick against which board
performance and accountability are
measured.
S a r b a n e s a t a G l a n c e
While the Sarbanes-Oxley Act leaves
many questions unanswered and allows
federal agencies broad discretion in
enforcing its requirements with publicly-
held companies, the following provisions
are applicable to nonprofit organizations:
• The role of independent directors and
their representation on audit and other key
board committees
• Executive compensation and loan
arrangements
• New disclosure requirements for
changes affecting the company's financial
status and the adequacy of company
financial statements and controls
• Detailed codes of ethics, business
conduct and comprehensive conflict-of-
interest policies.
Each of these areas is discussed in
more detail below.
Independent directors. Independent
directors arc the linchpin of many of the
public-company reforms. To be
considered "independent." directors must
be tree of relationships with the
company/organization or its management
that might influence their decisions.
Relationships affecting director
independence include employment,
vendor, or consulting arrangements, as
well as indirect links through family,
business or charitable organizations in
which the board member may hold an
officer or director position.
Sarbanes-Oxley and the related rules
of stock-listing organizations (such as the
New York Stock Exchange) sharpen the
focus on the role of independent directors
by specifying governance oversight
activities in which only independent
direetors should be involved. For example.
independent directors must meet together
at regular intervals without eithe.
Similar to Corporate Governance in East Asia (Japan, Korea, Greater China) (20)
Reconceptualising Global Finance and its Regulation [Updated]Raul A. Lujan Anaya
[Amended in Cap. IV, pages 6, 7]
Notes and remarks of my own, on Executive (Law Practice) Seminar: "Reconceptualising Global Finance and its Regulation" taken place at the University of Hong Kong, by mid December 2013, covering 4 topics:
1. Human Rights & Social Responsibility in Finance;
2. "Shadow Banking" & Systemic Risk;
3. Transnationalization of Compliance Frameworks;
4. 'Lex Mercatoria' Applied to Finance.
Entropía (Social) Global y Desarrollo Sustentable: Un Enfoque Histórico-Compa...Raul A. Lujan Anaya
Proyecto para aprobar la materia de Filosofía del Derecho (calificada con honores, 100/100):
Tesina de 40 cuartillas (+21,000 palabras) en la cual he desarrollado una noción económica y social acerca del concepto de Desarrollo Sustentable, y llevado a cabo un estudio de cómo dicha noción ha evolucionado a lo largo de la historia, su impacto en la ciencia jurídica y cómo ha de ser garantizado como derecho fundamental del hombre y deber de las naciones...
My Memories on Hong Kong & Singapore Residential ResearchRaul A. Lujan Anaya
Four day seminar and fieldwork trip to Singapore: carrying out intensive research, surveying and discussion in teams, to provide report about the particular aspects of public policy-making in Southeast Asia, under a comparative point of view (considering the experience of Hong Kong and Singapore) in strategic fields such as: social welfare, urban planning, environmental regulation, democratic transition, institutional relations between public and private sectors, etc.
Trust Services as Public Sector Tool in Finance (a Comparative Approach)Raul A. Lujan Anaya
In this work, I’m planning to assess the applicability of the Latin American trust system, adopted concretely in the case of Mexico (MX) in both public and private sectors, to be implemented for the public sector of HK...
The document provides an analysis of Queensland state's budget for the 2011-2012 fiscal year. It summarizes the state's revenues and expenses for 2010-2011 and 2011-2012. Total revenues increased from $38.5 billion in 2010-2011 to $38.1 billion in 2011-2012, mainly from higher Commonwealth grants. Total expenses rose from $4.4 billion to $6.4 billion respectively, mainly due to increases in superannuation benefit payments and borrowing costs. The budget format focuses on economic planning and performance but could benefit from being more transparent on program justifications and shortcomings.
This document discusses democracy and political reform in Hong Kong. It provides background on Hong Kong's political system and struggle for universal suffrage. Key points include:
1) Hong Kong has a semi-democratic political structure designed to work under authoritarian guidelines from Basic Law. This clashes with the democratic ambitions of its people.
2) The document outlines Hong Kong's development of democratic ambitions before and after the 1997 handover from Britain to China.
3) There is an ongoing struggle for universal suffrage, with promises of suffrage being continuously postponed, frustrating pan-democratic groups. Election reforms are a complex six-step process that is difficult to achieve.
This document is a conceptual essay by student Raul Alejandro Lujan Anaya exploring how globalization affects domestic policymaking, specifically in Hong Kong. The essay argues that globalization has significantly influenced policymaking beyond just economic areas by facilitating cultural, social, and ideological exchanges worldwide. It asserts that globalization was a factor in social movements in Hong Kong in the 1960s that pushed the government to consider human rights and that ongoing issues around national security and education point to globalization's continuing impact on challenging authorities and policies in Hong Kong today.
How can commercial and policy-transfer relations be improved nowadays between these two Newly Industrialized Countries (NICs), which have historically acted as partners and rivals, in a current context of growing global interaction and competition?
Receivership and liquidation Accounts
Being a Paper Presented at Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) on Friday, August 18, 2023.
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordinary And Special Businesses And Ordinary And Special Resolutions with Companies (Postal Ballot) Regulations, 2018
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Massimo Talia
This guide aims to provide information on how lawyers will be able to use the opportunities provided by AI tools and how such tools could help the business processes of small firms. Its objective is to provide lawyers with some background to understand what they can and cannot realistically expect from these products. This guide aims to give a reference point for small law practices in the EU
against which they can evaluate those classes of AI applications that are probably the most relevant for them.
What are the common challenges faced by women lawyers working in the legal pr...lawyersonia
The legal profession, which has historically been male-dominated, has experienced a significant increase in the number of women entering the field over the past few decades. Despite this progress, women lawyers continue to encounter various challenges as they strive for top positions.
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee
Presentation slides for a session held on June 4, 2024, at Kyoto University. This presentation is based on the presenter’s recent paper, coauthored with Hwang Lee, Professor, Korea University, with the same title, published in the Journal of Business Administration & Law, Volume 34, No. 2 (April 2024). The paper, written in Korean, is available at <https://shorturl.at/GCWcI>.
Lifting the Corporate Veil. Power Point Presentationseri bangash
"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
Fraud or Illegality: If shareholders or members use the corporate structure to perpetrate fraud, evade legal obligations, or engage in illegal activities, courts may disregard the corporate entity and hold those individuals personally liable.
Undercapitalization: If a corporation is formed with insufficient capital to conduct its intended business and meet its foreseeable liabilities, and this lack of capitalization results in harm to creditors or other parties, courts may lift the corporate veil to hold shareholders or members liable.
Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
Matthew Professional CV experienced Government LiaisonMattGardner52
As an experienced Government Liaison, I have demonstrated expertise in Corporate Governance. My skill set includes senior-level management in Contract Management, Legal Support, and Diplomatic Relations. I have also gained proficiency as a Corporate Liaison, utilizing my strong background in accounting, finance, and legal, with a Bachelor's degree (B.A.) from California State University. My Administrative Skills further strengthen my ability to contribute to the growth and success of any organization.
Matthew Professional CV experienced Government Liaison
Corporate Governance in East Asia (Japan, Korea, Greater China)
1. CORPORATE GOVERNANCE IN EAST ASIA
EXECUTIVE (LAW AND BUSINESS) SEMINAR
The University of Hong Kong
Saturday, 22 February 2014.
Corporate Governance Concepts and Challenges in Korea:
Principal framework. 3 LEGAL AND REGULATORY INSTRUMENTS:
Korean Commercial Code (KCC);
KCC amendments (20 times), last one in 2011;
Fair and transparent management practices: 3 POINTS TO CONSIDER.
(a) Prevention of usurpation of corporate opportunities;
(b) Self-dealing transactions;
(c) Compliance Officer system.
Usurpation of corporate opportunities:
· DUTY OF LOYALTY, need to avoid conflicts of interest;
· Obtain authorization from Board of Directors (BoD), to charge or use any corporate assets.
Self-dealing transactions:
· RESTRICTIONS, approval from the BoD;
· Amendment to KCC: transactions BETWEEN AFFILIATES constitute self-dealing.
Compliance Officer system:
· This applies to all listed corporate with capital above KRW 300 MILLION;
· Officer has to possess COMPETENT KNOWLEDGE and RELEVANT EXPERIENCE;
· Executive Officer cannot be Representative Director;
· Most Korean corporates are managed by Executive Officers, instead of BoD;
· Korean corporate structure is different from that of American (US) system.
Global Issues of Corporate Governance (CG) in East Asia:
In USA, Constituency Statutes (internal -private regulation) of the company has become the
Directors’ Guidebook;
In UK, the Companies Act (legal framework), as well as Corporate Law reforms and Case
Law are the main instruments which are to guide CG and management;
2. In Korea (as well as within several jurisdictions within East Asia), tendency has been more
towards legal and regulatory (external) controls, which serve as guidance framework for
Directors’ performance.
However, under the Korean jurisdiction, corporate management CONTROLS HAVE BEEN
TIGHTENED SINCE THE 2008 ECONOMIC CRISIS:
· There was no need that the BoD exercised audit functions (nowadays, the BoD must have an
Audit Committee within itself);
· After the 2008 crisis, concept of Outside Director was int roduced, especially for listed
companies.
But, who is, and what can (or should) the OUTSIDE DIRECTOR (OD) do?
Listed companies in Korea have an obligation of appointing an OD;
Duties and responsibilities of the OD are especially regulated (under specific and relevant
corporate, financial laws and ordinances);
The concept of OD has been subject of continuous controversies: surveys, evaluation (BoD
meetings, transparency, accountability), critique (formalities, red tape); however, there has
been consensus on the need to keep implementing and even improving, the figure of the
OD;
Though there have been efforts in establishing a clear and solid framework for defining its
duties and responsibilities, OD’s need empowerment (gi ven the needs of pos sessing
sufficient qualifications, defining the scope of related persons, as well as limiting
sharehol ders’ influence in order to ensure impartiality, as it may happen wth the case of
chaebol issues: minority-interest companies);
Why do OD’s need empowerment and more solid protection under the law? Because, i f
they incur in breach of duties, they may be held liable before the BoD and the
sharehol ders: thei r rol e brings hi gh expectations, but OD’s do not entail full -time
responsibilities, nor permanent or official appointments, as well they need the advice and
support from accountants, auditors and consultants;
In brief and concise terms: the OD ACTS AS WATCHDOG within the company (though
outside the interests of the corporate), though the principal risk, and possible weakness, of
its role underlies in its liability to minority shareholders, and its need of support by law
enforcement authorities.
Are Outside Directors Necessary in Japan?
[Reference: Kawasaki Case, an expanding shipbuilding company, listed in the Tokyo Stock
Exchange;
Issue: Removal of the Chairman, CEO of the Company!]
3. In Japan, there are generally FOUR CRUCIAL ELEMENTS for defining the Committee System
as a tool of effective CG in the local jurisdiction:
· The BoD;
· The shareholder’s meeting;
· The BoD meeting;
· The auditor’s committee of the BoD (which is conformed and operates alongside with the
nomination and compensation committees)…
However, only 3% OF ALL LISTED CORPORATES USE the COMMITTEE SYSTEM in Japan.
Under the Kawasaki Case, has CG worked or failed? TWO ASPECTS:
· Positive: BoD watches over the representative Director;
· Negative: BoD has the duty of maximizing the value of the company;
If there is failure to conciliate interests within the BoD, there is a considerable risk o f entering
into POWER STRUGGLE between the CEO and the BoD…
Then, we are getting to the point, where we can say it is recommendable to appoint an Outside
Director within the BoD of listed companies in Japan, the same way, or at least in similar terms
to the Korean way;
In Japan it is not compulsory to appoint an OD, however, in the light of recent proposals for
amendments to the Companies Act in Japan, it may be very desirable;
OD is to be appointed under companies’ discretion…
National Pension Fund in Korea:
Context nowadays:
· Inactivity in the exercise of voting rights by investors;
· Preference to sell stocks than changing corporate policies;
· National Pension Fund (NPF) has diversi fied investment schemes in stocks under the Capital
Markets Act.
The VOTING PROCESS within the NPF Investment Committee is defined:
On one side, by markets and regulators (GUIDELINES);
On the other side, by shareholders’ meeting (DECISION):
(a) Voting ballot (written or via e-tools),
(b) There has to be separation in the votes of the CEO and of the Chairman of the BoD.
Corporate Abuses and Dysfunctional Board, Dispute Resolution:
4. Current situation:
Under Anglo-American law, Directors’ duty is to act in the interest of the Company;
Shareholder Supremacy doctrine: They are bosses;
Companies shall (and need to) reduce transaction costs;
Drectors’ incentives are tied to profit maximization;
Creation of STAKEHOLDERS’ BOARDS (SHB);
Adam Smith’s INVISIBLE HAND…
Nowadays, we have 3 INNOVATION MODELS in Asia:
· Stakeholders’ theory;
· Corporate Social Responsibility;
· Confucian Values applied to CG…
However, it is also important to mention there are 3 MAIN CHALLENGES:
· Determine percentages of BoD and SHB interest representations: 50-50? Majority? Co-determination?;
· How to represent the consumer and the community?;
· Longer decision-making, more complicated, slower to respond to a shifting environment and
constantly-changing markets.
Then, WHAT CAN BE DONE?
The idea of maximizing profits is main cause for corporate abuses, such as misallocation of
resources, or macro-inefficiency;
There also comes a NEE D TO REFORM the unitary shareholders’ representati ve board
system (shareholders represented by the BoD);
For the case of MNC’s IN DEVELOPING COUNTRIES, where there is history of abuses or
neglection of stakeholders, they NEED TO CREATE SHB’s as well…
Public vs. Private Enforcement:
US vs. China (PRC) transaction models:
US system is litigation-friendly, mainly adopting a post-conflict settlement approach;
PRC system is prevention-friendly, mainly adopting a regulatory and conciliatory
approach…
However, we can say that the Hong Kong experience (where the system may be considered
“hybrid”), may bring us light for innovating in New Dispute Resolution (or better said, Alternate
Dispute Resolution, ADR) schemes. This is mainly because:
· Common-law institutions provide us more flexibility for ADR means;
· Equity principles are relevant…
5. BUT THE MAIN DISADVANTAGE IN THE COMMON-LAW JURISDICTIONS is that rulings
must be coherent (not contradict each other).
ARBITRATION or LITIGATION?, In order to solve disputes:
Arbitration, can be considered more as a “consented” resol ution procedure, shareholders
are entitled to choose arbitration in case of imminent or incoming dispute (as long as
permitted);
Arbitration is useful, as it helps to protect the interests of minority shareholders.
Litigation, on the other hand, is compulsory by law;
The main problem with Litigation is that, despite it can be more effectively enforced, it
leaves a very narrow or reduced margin for ending Dispute Resolution process with a
friendly resolution that protects interests of both the shareholders and stakeholders; the
outcome can be uncertain…
Confucianism in Corporate Governance:
Agency Theory and Stewardship as Schools of Confucianism in East-Asian CG;
In the PRC we are facing two relevant challenges:
· Systemic problems;
· Quality of individuals;
These two aspects can be noticed in issues, such as: inside control gaps, fraudulent trading,
bribery, corruption and certainly recurrent malpractices in transaction processes, etc…
Consider the roles and intentions of CG participants:
· Agents and principals are UTILITY MAXIMIZERS;
· Basic assumption in economics: self-interest;
Collectivism vs. Individualism?,
· Constant challenge: reduce costs, using the stewardship and agency theories.
RULE BY LAW vs. RULE OF LAW?;
Prosecution vs. Equity;
AGENCY (contention, enforcement) vs. STEWARDSHIP (trust-building)…
Evil (XUNZI), Agency vs. Good Faith (HANFEI), Stewardship:
Xunzi: Presumed evil nature, goodness is false, COERCIVE ENFORCEMENT IS
NECESSARY to suppress malbehavior;
Hanfei: Law should act as an instrument to maintain order, however on a GOOD FAITH
APPROACH (self-regulation), the legal system should trust the representatives…
6. Which approach is better? Consider the CONTEXT AND CHALLENGES:
· Independent and transparent system is important, otherwise rules will be paper without effects;
· Under the stewardship theory, Directors are stewards (acting in good faith for the interests of
the company);
· Question: How to align personal needs to those of the corporation?…
In line with the stewardship theory, we can think about the principles of Mencius (vs. those of
Confucius, which go more in line with the agency teory): Human nature is good and beautiful;
Then, we need to trust our colleagues and representatives. PEOPLE CAN SELF-REGULATE
THEMSELVES.
· Education of business ethics will be more influential in the long run…
Final Questions and Remarks:
Question 1.
Can the figure of the Outside Director apply to the CG framework in Hong Kong (even with its
limitations and liabilities)?
It may be a sensible idea to bring the figure of the OD to Hong Kong, but there is a real
need to keep promoting diligence in the exercise of duties of Directors (generally), even
when the liabilities of the OD are limited (in Korea and Japan, Directors enjoy an average
remuneration threefold that of HK);
It is also very important to work in making compatible the figure of the OD with the
Common-law framework of HK, in comparison with the Civil-law frameworks of Korea and
Japan…
Question 2.
Are stakeholders’ interest advocacy, similar to that of workers’ unions interest advocacy?
This remains as an open question: stakeholders’ advocates do not have a vote in
stakeholders’ decisions, even though they represent the interests of stakeholders;
Enforcement remains as a crucial issue, even when there are extensive legal and
regulatory frameworks in East Asia, including within HK;
Directors have a duty of balancing int erests (those of companies’ shareholders with thos e
of stakeholders)…