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Lesson 5: Corporate governance - Coggle Diagram
Lesson 5: Corporate governance
What is corporate governance?
Control mechanisms to prevent self interested managers from taking actions detrimental to shareholders and stakeholders
Not all shareholders are alike and share the same goals
Integrity of most financial markets greatly depends on the role plated by a number of gatekeepers
Corporate governance systems can vary across countries
Board responsibilities
Decision making
Advisory
Oversight
separate and distinct from those of management
Board trends
Board size and composition
Board expertise
Board independence
Board motivation
Board leadership
Separation of Chairman and CEO positions
Reduction of conflict of interest
Non-executive chairman can serve as a valuable sounding board
Time and effort needed to do both jobs is high