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Corporate Governance, Fifth Edition

Book Description

In the wake of the recent global financial collapse the timely new edition of this successful text provides students and business professionals with a welcome update of the key issues facing managers, boards of directors, investors, and shareholders.

In addition to its authoritative overview of the history, the myth and the reality of corporate governance, this new edition has been updated to include:

  • analysis of the financial crisis;

  • the reasons for the global scale of the recession

  • the failure of international risk management

  • An overview of corporate governance guidelines and codes of practice;

  • new cases.

Once again in the new edition of their textbook, Robert A. G. Monks and Nell Minow show clearly the role of corporate governance in making sure the right questions are asked and the necessary checks and balances in place to protect the long-term, sustainable value of the enterprise.

Features 18 case studies of institutions and corporations in crisis, and analyses the reasons for their fall (Cases include Lehman Brothers, General Motors, American Express, Time Warner, IBM and Premier Oil.)

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Cases in Point
    1. Chapter 1
    2. Chapter 2
    3. Chapter 3
    4. Chapter 4
    5. Chapter 5
  5. Preface
    1. Notes
  6. Acknowledgments
  7. Introduction — How to Use this Book
    1. How to Use This Book
  8. Chapter 1: What is a Corporation?
    1. Defining the Corporate Structure, Purpose, and Powers
    2. Evolution of the Corporate Structure
    3. The Purpose of a Corporation
    4. Metaphor 1: The Corporation as a “person”
    5. Metaphor 2: The Corporation as a Complex Adaptive System
    6. Are Corporate Decisions “Moral”?
    7. Are Corporations Accountable?
    8. Three Key External Mechanisms for Directing Corporate Behavior: Law, The Market, and Performance Measurement
    9. What does “Within the Limits of the Law” Mean?
    10. A Market Test: Measuring Performance
    11. Equilibrium: The Cadbury Paradigm
    12. Esg: Environment, Social Governance – A New Way to Analyze Investment Risk and Value
    13. Quantifying Nontraditional Assets and Liabilities
    14. Future Directions
    15. Summary and Discussion Questions
    16. Notes
  9. Chapter 2: Shareholders: Ownership
    1. Definitions
    2. Early Concepts of Ownership
    4. A Dual Heritage: Individual and Corporate “RIGHTS”
    5. The Reinvention Of The Corporation: Eastern Europe In The 1990S
    6. The Evolution Of The American Corporation
    7. The Essential Elements Of The Corporate Structure
    8. The Mechanics Of Shareholder Rights
    9. The Separation Of Ownership And Control, Part 1: Berle and Means
    10. Fractionated Ownership
    11. The Separation of Ownership and Control, Part 2: The Takeover ERA
    12. Waking The Sleeping Giant
    13. A Framework For Shareholder Monitoring and Response
    14. Ownership and Responsibility
    15. No Innocent Shareholder
    16. To Sell Or Not To Sell: The Prisoner's Dilemma
    17. Who The Institutional Investors Are
    18. The Biggest Pool Of Money In The World
    19. Public Pension Funds
    20. Private Pension Funds
    21. The Sleeping Giant Awakens: Shareholder Proxy Proposals on Governance Issues
    22. Focus on The Board
    23. Hedge Funds
    24. Synthesis: Hermes
    25. Investing in Activism
    26. New Models and New Paradigms
    27. The “Ideal Owner”
    28. Pension Funds as “Ideal Owners”
    29. Is the “Ideal Owner” Enough?
    30. Summary and Discussion Questions
    31. Notes
  10. Chapter 3: Directors: Monitoring
    1. A Brief History of Anglo-American Boards
    2. Who are They?
    3. Who Leads the Board? Splitting the Chairman and Ceo and the Rise of the Lead Director
    4. Diversity
    5. Meetings
    6. Communicating with Shareholders
    7. Special Obligations of Audit Committees
    8. Ownership/Compensation
    9. Post-Sarbanes–oxley Changes
    10. Board Duties: The Legal Framework
    11. The Board’s Agenda
    12. The Evolution of Board Responsibilities: The Takeover Era
    13. The Fiduciary Standard and the Delaware Factor
    14. The Director’s Role in Crisis
    15. Limits and Obstacles to Board Oversight of Managers
    16. Information Flow
    17. Practical Limits: Time and Money
    18. The Years of Corporate Scandals – Boards Begin to Ask for More
    19. Director Information Checklist
    20. Who Runs the Board?
    21. Catch 22: The Ex-CEO as Director
    22. Director Resignation
    23. CEO Succession
    24. Director Nomination
    25. Limits and Obstacles to Effective Board Oversight by Shareholders
    26. Carrots: Director Compensation and Incentives
    27. Sticks, Part 1: Can Investors Ensure or Improve Board Independence by Replacing Directors who Perform Badly or Suing Directors who Fail to act as Fiduciaries?
    28. Can Directors be Held Accountable Through the Election Process?
    29. Sticks, Part 2: Suing for Failure to Protect the Interests of Shareholders – are the Duties of Care and Loyalty Enforceable?
    30. Future Directions
    31. Summary and Discussion Questions
    32. Notes
  11. Chapter 4: Management: Performance
    1. Introduction
    2. What Do We Want from the CEO?
    3. The Biggest Challenge
    4. Risk Management
    5. Executive Compensation
    6. Stock Options
    7. Restricted Stock
    8. Yes, We have Good Examples
    9. Shareholder Concerns: Several Ways to Pay Day
    10. Future Directions for Executive Compensation
    11. CEO Employment Contracts
    12. CEO Succession Planning
    13. Sarbanes–oxley
    14. Dodd–frank
    15. Employees: Compensation and Ownership
    16. Employee Stock Ownership Plans
    17. MondragÓn and Symmetry: Integration of Employees, Owners, and Directors
    18. Conclusion
    19. Summary and Discussion Questions
    20. Notes
  12. Chapter 5: International Corporate Governance
    1. The Institutional Investor as Proxy for the Public Interest
    2. The International Corporate Governance Network
    3. The Global Corporate Governance Forum
    4. Governancemetrics International (GMI)
    5. World Bank and G7 Response
    6. The Global Carbon Project (GCP)
    7. A Common Framework for Sustainability Reporting
    8. Towards a Common Language
    9. Vision
    10. Summary and Discussion Questions
    11. NOTES
  13. Chapter 6: Afterword: Final Thoughts and Future Directions
    1. Beyond the Nation State
    2. Government as Shareholder: The Institutional Investor as Proxy for the Public Interest
    3. NOTES
  14. Index