This course addresses the structures and tools used to prevent corporate failures, fraud and the destruction of value at the top-level of corporations. The course starts by outlining the theories underlying the corporate governance problem. This includes the rise of the modern corporation and the separation of ownership and control. The principal-agent theory is used as the starting-point for understanding the basic corporate governance problem. However, the course also addresses alternative theories, such as resource dependence theory and stakeholder theory.
Central topics:
- Historical and theoretical background to corporate governance.
- Boards of directors; structure, composition, and processes.
- Ownership, corporate boards and top-management.
- Use of accounting information by corporate boards.
- Management control and corporate governance.
- Corporate governance as an integrated system of controls.
- National variety in corporate governance regulation and practice.
- Codes of corporate governance.
- Sustainability and corporate governance.
Ethics and sustainability are integrated in the course as central themes in relation to corporate scandals (e.g. Enron, RBS, Satyam). The themes are also addressed in relation to the normative question of what is the goal of a company. Sustainability is conceptualised as ESG (environmental, social and governance) factors.