Corporate-governance---Daniels-Fund-Ethics-Initiative-at-UNM公司治理-丹尼尔斯基金道德倡议在UNMPPT课件

1 Corporategovernance Whatisitandwhydoesitmatter Corporategovernancerepresentstherelationshipamongstakeholdersthatisusedtodetermineandcontrolthestrategicdirectionandperformanceoforganizations Corporategovernancehasbothstrategicandethicalimplications 2 Strategicimplicationsofcorporategovernance Simplyput badcorporategovernanceleadstobadstrategyformulationandimplementation Ifstrategyisaboutmatchingthefirm sinternalresourcesandcapabilitieswithopportunitiesfromtheexternalenvironment thencorporategovernanceshouldaskthefollowingsortsofquestions 3 Strategicimplicationsofcorporategovernance 2 Dowehavetherightstrategy givenwhatwedowell Isourstrategymatchedtotheexternalenvironment economy socialexpectations etc Arewecapableofexecutingthestrategy Dowehavetherighttopmanagementteam Iftheanswertooneormoreofthesequestionsis no whatdoweneedtochange 4 Strategicimplicationsofcorporategovernance 3 Badstrategymakesitharderforfirmstofulfilltheireconomicandethicalresponsibilitiestostakeholders includingshareholdersandemployees 5 Ethicalissuesincorporategovernance Thereareseveralkeystrategicandethicalissuesincorporategovernance includinghowtoaligntheinterestsoftopmanagersandshareholders theproperlevelandfunctionofexecutivecompensation whomonitorsthetopmanagementteamandhowthatmonitoringoccurs andinclusionofshareholdersandnon shareholderstakeholders 6 Aligningtheinterestsofshareholdersandmanagers Oneoftheprimaryissuesincorporategovernanceishowtoaligntheinterestsofshareholdersandmanagers Whilemostpeopledon tobjecttohighlevelsofpayfortopmanagers suchasCEOsandCFOs theyexpectpaytobeconnectedtoperformanceandstockprice 7 Whydoweneedtoaligntheinterestsofshareholdersandmanagers AtonetimeinU S history firmswereownedandmanagedbyfoundersandtheirdescendents Asfirmsgrewlarger theyneededmorecapitalthancouldeasilybeprovidedbyonepersonorfamily andsothepubliccorporationbecamemorecommon 8 Whydoweneedtoaligntheinterestsofshareholdersandmanagers 2 Corporationshavetwoimportantvirtues Theyallowshareholders investors toreduceriskbylimitingtheirliabilitytothevalueoftheirinvestment Theyallowshareholderstobuyandselltheirownershipinterestseasily Butthereisabigproblemthatcreatesapotentialmisalignmentofinterestsbetweenshareholdersandmanagers TheSeparationofOwnershipandControl 9 Whydoweneedtoaligntheinterestsofshareholdersandmanagers 3 Managershaveday to daycontrolofthecompany Thetopmanagementteam forexample isinchargeofthingssuchasstrategy hiringandfiringemployees andsoon Shareholdersdon t own thecorporationinthesamewaythatyouownyourcar theydon thavephysicalpossessionofapartofthecorporation Rather whattheyownisalimitedsetofdecisionrights therighttosharefinanciallyinthecompany ssuccess andapro ratashareofthecompanyafterallofitsdebtsarepaidifthecompanyisliquidated 10 Whydoweneedtoaligntheinterestsofshareholdersandmanagers 4 Theseparationofownershipandcontrolleadstoaprincipal agentrelationship Theprincipaldirectstheactivitiesoftheagent Theagentactsonbehalfoftheprincipal basedontheprincipal sdirection Theagentowesadutyofloyaltytotheprincipal Forpubliccorporations shareholdersareprincipalsandmanagersareagents anagencyproblemexistswhenagentshaveincentivestoactinwaysthatarecontrarytotheinterestsoftheirprincipals 11 Whydoweneedtoaligntheinterestsofshareholdersandmanagers 5 Whatmakesagencyproblemsparticularlylikelyinpubliccorporationsisthelargenumberofever changingprincipals shareholdersholdingtheirstockforvaryingperiodsoftime allofwhomwouldbebetteroffifsomeshareholderswouldmonitorthefirm smanagers Lessmonitoringofmanagersbyshareholdersthanisoptimaloccursbecausemonitoringiscostly butallshareholdersbenefitfromtheactionsofthefewthatengageinmonitoring thefree riderproblem Thinkofitthisway Wouldyoualwaysbehaveperfectlyifnoonewaswatchingyou 12 Howdotopmanagersmisbehave Becauseofagencyproblems managershaveincentivestodothingsthatbenefitthemselvesattheexpenseofshareholdersandotherstakeholders toohighcompensation over diversification mergers etc 13 AlignmentMechanism1Executivecompensation TheaveragecompensationofaFortune500CEOin2007was364timesthatoftheaverageworker AnEconomicPolicyInstitutestudyfoundthatbetween1989and2007 CEOpayincreasedby163percent comparedwithonly10percentfortheaverageworker bothadjustedforinflation Anumberofstudieshavefoundthatthereisnocorrelationbetweenexecutivecompensationandfirmperformance andrecentworkbyErickson Hanlon andMaydew 2003 foundthatexecutivecompensationplansweightedmoreheavilytowardstockcompensationwererelatedtotheincidenceofaccountingfraud 14 Alignmentmechanism1Executivecompensation 2 Thereisevidencethat 1 topmanagershavetoomuchinfluenceonsettingtheirownpayand 2 boardshavenotdoneagoodjobofconnectingexecutivecompensationtoperformance howeverperformanceisdefined Recentscandalsinvolvinginsidertradinghaveaddedtocynicismaboutbusiness andpaythatistoohighrelativetoperformancemaymakethecompanyatargetofcriticism 15 Alignmentmechanism1Executivecompensation 3 Goodexecutivecompensationplanstakeintoaccountavarietyofstrategicandfinancialindicatorsandthenrewardforsuperiorperformancerelativetoindustrypeers ratherthanabsolutelevelsofstockperformance Intheabsenceofgoodinformationaboutacorporation sperformanceandstrategies shareholdersandotherstakeholdersareunabletoadequatelyevaluatetop managerperformance andover compensationoftopmanagersisalikelyresult 16 Alignmentmechanism2Boardsofdirectors Rememberthatshareholdersarenotinchargeoftheday to dayoperationsofacorporation Rather theyelectdirectorswhothenhiremanagerschargedwithformulatingandimplementingthecompany sstrategy However shareholdershavelittlecontroloverwhoisnominatedtotheboardofdirectors Onlyunderverylimitedcircumstancescantheyevennominateaminorityofthecompany sdirectors 17 Alignmentmechanism2Boardsofdirectors 2 Asaresult membersofacompany sboardofdirectorsmayfeelmorebeholdentotheCEOandthetopmanagementteamthantotheshareholdersinwhoseintereststheyaresupposedtobeacting Boardsshouldbefocusedonevaluatingtheorganization s strategicandfinancial performanceandfiringtopmanagerswhenthatperformanceissubstandardandunlikelytoimprove 18 Alignmentmechanism2Boardsofdirectors 3 Boardsshouldalsohavearespectfulrelationshipwiththetopmanagementteam thinkofthemselvesasindependentfromtheCEO andevaluatetheirownperformanceonaregularbasis Suchboardsdoabetterjobofprotectingshareholdervalue 19 Alignmentmechanism3Themarketforcorporatecontrol Whenacompanyisperceivedtobefinanciallyundervalued thereisthepossibilitythatitcanbetakenover oftenthroughahostiletakeover Whenthishappens thereisoftenanewmanagementteamandstrategyputintoplace Someobserversproposethatthethreatofbeingtakenoverifthecorporationisunderperforming whatiscalledthemarketforcorporatecontrol providesanadditionalmeansofaligningtheinterestsofshareholdersandmanagers 20 Theroleofinstitutionalfailuresincorporategovernance Manyofthewell knowncorporate governancefailuresareduetowidespreadinstitutionalfailures includingfailuresbyregulators accountingfirms andfinancialanalysts Takeoneofthesefailuresoutoftheequation andperhapssomeoftheproblemsobservedinthelasttenyearsmightnothaveoccurred Inparticular theincentivestructuresofaccountingfirmsandfinancialanalystscausedmanyofthemnottoprovideappropriateoversightandcriticismofcorporatemanagers Intheabsenceofeffectivemonitoringofmanagers badthingstendtohappentocompanies 21 Includingnon shareholderstakeholdersincorporategovernance Ethicistsarguethatalthoughnon shareholderstakeholdersdonotgettovotelikeshareholdersdo andaswasnotedbefore thatvoteislimitedinitsscope theirinterestsshouldbetakenintoaccountincorporategovernanceprocesses Companies managers andboardsthattakealong termviewoftheorganization sstrategymightwanttoconsidertheinterestsofnon shareholderstakeholdersverydirectly astheycanaffect positivelyornegatively theorganization sabilitytocreatevalueforshareholders 22 Ethicaldutiesmanagersandboardsoweshareholders Accurateandtimelyinformationaboutthecorporation sperformanceandbusinessprospects soshareholderscanmakeinformeddecisionsabouttheirinvestments BesteffortstoenhanceshareholderwealthAvoidanceofself servingbehavior 23 Afinalcomment It sprettyapparentthatmanyboardshavefailedtodotheirjobs Thatsaid shareholdersandnon shareholderstakeholdershavearoletoplayincor