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Corporate Governance Around the World - Coggle Diagram
Corporate Governance Around the World
Remedies for the
Agency Problem
Remedies for the Agency Problem
Remedies for the Agency Problem
Governance mechanisms
Consequences of Law
Consequences of Law
Ownership and Control Pattern
Private Benefits of Control
Ownership Structure of
Daimler-Benz AG, 1990
Capital Markets and Valuation
Law and Corporate Governance
Thus the content of law protecting investors’ rights varies a great deal across countries.
It should also be noted that the quality of law enforcement varies a great deal
across countries.
Commercial legal systems of most countries derive from a relatively few legal origins.
The Agency Problem
The Agency Problem
Shareholders allocate decision-making
authority to the managers
Residual control rights refer to the right to make discretionary decisions under those contingencies that are not specifically covered by a contract
Managers can exercise substantial discretion over the disposition and allocation of investors’ capital
Investors are no longer assured of receiving fair returns on their funds
The Agency Problem (Continued)
With the control rights, managers may allow themselves to consumer
exorbitant perquisites
Corporate Governance Reform
Political Dynamics
Objectives of Reform
The Sarbanes-Oxley Act
Corporate Governance Reform
The Cadbury Code of Best
Practice
The Dodd-Frank Act
Cadbury Code