2.0

Average Course Rating

The course is mainly about the practical implications of the principal-agent dilemma due to separation of ownership and control. The separation leads to conflicts of interest between the principals (shareholders) and agents (management) that results in increased risk. The value of a firm depends on good corporate governance practices that protects shareholders rights and lowers the cost of capital due to better risk mitigation. The set of good governance practices, rules, and regulations that attract investments and creates jobs, as well as effective environmental and socially responsible considerations promote opportunities for better access to finance and improve firm value. The three main topics in this course are the shareholders; the board; and the management. Topics cover executive compensation practices and policies, boardroom structure and practices, benefits and problems of corporate disclosure and transparency, and the value of the shareholder vote. The course also covers management abuses, takeovers, mergers and acquisitions, and the role of financial institutions and credit rating agencies. We emphasize transparency, accountability, responsibility, and fair and equitable treatment of all shareholders to help implement good corporate governance practices that reduce agency conflicts and reduce risk. Good corporate governance practices is about building the business case rather than simple compliance. A corporate governance scoring project demonstrates how a company’s sustainable, socially responsible investing and governance (ESG) standing profile can be rated as an indicator for building investor confidence and ensuring shareholder protection.