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CS4 – Stakeholders and Governance, G5 (林奧都 - Aldo, 廖莉琪 - Angela, 陳威霖 -…

- - - - Example : adopting balance scoreboard that includes metrics related to customers, operations, organizational, and financial
        
        Customer : differentiation, cost, quick response
        
        Operation : product developed, order fulfillment, demand management
        
        Financial : EVA, profitability, growth
        
        Organizational : leadership, learning, ability to change
  - - - cooperation and partnership with others are important for the long-run success of companies
        
        Example : Shopping malls, Apple, Amazon, Facebook, Coursera, etc
        
        These companies have created businesses where multiple players interact with each other on their platform in order to create value
  - - - poison pill provisions
        
        make it difficult and costly for shareholders to replace the company's management
        
        Netflix's board adopted a poison pill on 2020
        
        if any shareholder acquired more than 10 percent stake,Netflix would issue a large number of shares
        
        private equity industry getting huge growth
        
        prevent to take the company private
        
        the rise of so-called unicorns
        
        supposed to be a rare phenomenon has now become very common indeed
        
        two classes of shares
        
        publicly traded version has
        fewer voting rights
        
        voting rights are closely held by a core group that typically
        includes the founders of the company
        
        act in good faith to protect these long-term interests.
- - - - overseeing CEO succession plans
      - providing guidance on executives and their compensation
      - reviewing, monitoring, and approving strategic initiatives
      - conducting a risk assessment and mitigation
      - ensuring a firm's compliance with laws and regulations
      - ensuring that the firm's audited financial statements
      - recently problematic at both HP and Apple
      - selecting, evaluating and compesating the CEO
  - - - difference in national institutions and culture
        
        free market capitalism (more freedom)
        
        U.S
        
        state-directed capitalism (less freedom)
        
        china
        
        state-owned enterprises
    - - stakeholder capitalism
  - - - will look at lots of different metrics to make sure that it's actually good
    - - the monitoring by the board of directors
    - - that gave them then the incentive to manipulate the market to get the stock price higher in artificial ways
      - some intermediate range where you will get better performance in terms of compensation of the managers
      - institutional investors will even call up the CEO
    - - you have the chairperson of the board of directors being the monitor of the CEO
    - - the CEO chairperson could be very influential in the board of directors
        
        the point where the rest of the board is not particularly effective at monitoring the CEO
    - - have a separation of CEO and chairperson
    - - need rapid decisions, maybe having a separate chairperson CEO is going to slow you down
    - - always changing
    - - they're all competing with each other
- - - - real eatate bubble burst
        
        make deas with people that had no ability to pay back
    - - Tyco
      - Enron
      - WorldCom
  - - - Step 2
        
        Step 1
        
        Who are our stakeholder?
        
        What are our stakeholders' interest and claims?
      - Step 4
        
        Step 5
        
        What should we do to effectively address the stakeholder concerns?
        
        What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders?
      - What oppotunities and threats do our stakeholders present?
- - - - Ethical Responsibilities
        
        Philanthropic Responsibilities
        
        Corporate citizenship
        
        Do what is right, just, and fair
      - Economic Responsibilities
        
        Gain and sustain competitive advantage
      - Laws and regulations are society's codified ethics;define minimum acceptable standard
  - - - EX. United Arab Emirates, Japan, and India
    - - EX. China, Brazil, especially
        Germany
- - - - Limited liability for investors
      - Transferability of investor interest
      - Legal personality
      - Separation of ownership and control
- - - - Adverse selection problems
      - Moral hazard problems