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SMMCG10 [CS-4]Stakeholders and Governance, G10 members, Low - Coggle…
SMMC
G10
[CS-4]Stakeholders and Governance
Mechanisms of Corporate Governance
institution of capitalism
which is mechanisms
which lessen the problem of the separation of shareholder ownership and the risk-bearing principles
agency problems
takeover
If the firm's managers don't keep the stock price at a certain level, there's the treat that they may be taken over.
recruitment of executives from outside the firm
if the managers have good performance, they might be recruited by other companies.
monitoring by board of directors
The board of directors is in charge of evaluating the CEO and top management team of a company. It is a mechanism for reducing agency cost.
compensation heavily weighted toward stock options
It is to make sure that the manager will pay higher attention to the stock.
dept
The managers have to understand how to efficiently apply debt and free cash flow.
separate chairperson and CEO
This form is suitable or not depending on which kind of firm you are in.
internal control of multidivisional
If we have five divisions of a company and they are measured by the corporate staff in terms of return on asset, they are all competing with each other.
monitoring by institutional investors
An institutional investor has a large amount of investment in the organization.
function of the board of directors
the centerpiece of corporate governance
general strategic oversight and guidance
selecting, evaluating and compensating the CEO
overseeing CEO's succession plan
providing guidance on executives and compensation
reviewing, monitoring and approving strategic initiatives
conducting a risk assessment and mitigation
ensuring a firm's audited financial statements and compliance with laws and regulations
various corporate governance
state-directed capitalism(high control)
China
free market capitalism(more freedom)
the U.S.
stakeholder capitalism
Germany and France
Corporate Social Responsibility
the Pyramid of CSR
ethical responsibilities
philanthropic responsibilities
legal responsibilities
economic responsibilities
Does CSR help build competitive advantage?
It might depend on where you do business
focusing mostly on profit : United Arab Emirates
focusing more on CSR : Spain
generating a larger base for the reach of the footprint of the organization.
Corporate governance
Definition : the relationships among the stakeholders that is used to determine and control the strategic direction and performance of the organization
having good corporate governance
avoid
accounting scandals
global financial crisis
Asymmetric information :
inside information which is not fair
Adverse selection
misrepresentation of a job
Moral hazard
difficulty to ascertain whether the agent gives his or her best
Agency theory
viewing a firm as a nexus of a legal contrasts
Agency costs
Definition : the sum of specific costs incurred by principals because it is impossible to use governance mechanisms to guarantee total compliance by the agent
Public Firms and Their Role in Societ
y
stakeholders
external stakeholder
unions
governments
communities
suppliers
general public
customers
internal stakeholder
shareholders
shareholder primacy
why shareholder and shareholder return become a driving force
public corporations take money from equity investor
shareholder-centric worldview has been driven by an intellectual movement in finance and economics that emphasize s a market-centric neoliberal worldview
modern financial markets are a very powerful force
employees
bondholders
board members
managers
publicly traded corporation
limited liability for investors
the owner of stuck can buy and sell stuck
the board of directors is responsible for all of the stakeholders
separation of ownership and control
will the managers act in the best interest of the shareholders
hierarchy of authority
game of the state
shareholders
board of directors
managements
employees
financial crisis
accounting scandals
stakeholder management is needed
global financial crisis
routines for doing stakeholder impact analysis
step 3
what opportunities and threats do our stakeholders present?
step 4
what economic, legal, ethical and philanthropic responsibilities do we have to our stakeholders?
step 2
what are our stakeholders' interests and claims?
step 5
what should we do to effectively address the stakeholder concerns?
step 1
who are our stakeholders?
Recent Development
Targets
Platform
Ecosystem
The rise of ecosystem strategy or business ecosystem thinking
Interactive
Value
Shareholders
Company privatization
Society
Some stakeholders’ interests and considerations for the company’s long-term health and success
G10 members
DFLL Lucy
DSEAS Peggy
IBS Bryant
DFLL Eva
DFLL Ethser
DFLL Vivian
Low
High