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Centre for Financial and Management Studies (CeFiMS)

Corporate Governance

Course Code:
C244|C344
Unit value:

Introduction

This course is specially designed for the postgraduate study of such areas as management, finance, financial law, corporate law, economics and related subjects, and has been designed to increase the depth of your understanding of corporate government issues. The course places a strong emphasis on the relationship between theoretical concepts and real world issues, making a real contribution to your in-depth understanding of the relevant corporate governance issues and future career development.

Resources

Study Guide

You will receive a looseleaf binder containing eight 'course units'. The units are carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the further assigned readings. The unit files are also available to download from the Online Study Centre.

Textbooks

Monks, Robert A.G. and Nell Minow (2007) Corporate Governance, Fourth Edition, New York: Blackwell

Hansmann, Henry (2000) The Ownership of Enterprises, Cambridge MA: The Belknap Press of Harvard University

Readings

You will receive two volumes of Readings, which consist of recently published articles or seminal writings which augment and illustrate the main text.

Online Study Centre

You will have access to the OSC, which is a web-accessed learning environment. Via the OSC, you can communicate with your assigned academic tutor, administrators and other students on the course using discussion forums. The OSC also provides access to the course Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Objectives and learning outcomes of the course

When you have completed your study of this course you will be able to:

  • Outline and discuss the key legal, political and economic features of the major corporate governance systems found around the world
  • Analyse how corporate governance systems influence performance, including both the performance of individual firms and the allocation of capital within a country
  • Discuss the evolution of diverse ownership and governance structures across different economies
  • Evaluate theories of the firm, and explain how they are relevant to the diverse range of ownership structures that exist in reality
  • Address such practical questions, as how should the board of directors and executive teams be composed; how should executives and board of directors be remunerated given the legal, political and economic framework in the country; how do CEOs decide about the mix of debt and equity finance and how does the mix affect their discretion and control over cash flow?
  • Explain why the quality of corporate governance is relevant to capital formation
  • Describe why systematic failure of corporate governance can lead to failure of confidence that could spread from individual firms to entire markets or economies
  • Discuss the role of corporate governance codes and evaluate their usefulness in achieving better corporate governance practices.

Scope and syllabus

Course Units
Unit 1: Introduction to Corporate Governance
  • 1.1 Introduction
  • 1.2 Approaches to Corporate Governance
  • 1.3 The Evolution of Corporate Structure
  • 1.4 Corporate Governance, Capital Formation, Corporate Finance and Economic Growth
  • 1.5 Concluding Remarks
  • References and Websites
Unit 2: Theory of the Firm
  • 2.1 Competition and Cooperation
  • 2.2 Market Contracting Costs vs Ownership Costs
  • 2.3 Recent Unconventional Developments
  • 2.4 More on Complementary Perspectives
  • 2.5 Concluding Remarks
  • References
Unit 3: Corporate Governance and the Role of Law
  • 3.1 The Basic Question in the Debate
  • 3.2 Competing Explanations
  • 3.3 The Recent Rise of Equity Culture in the EU
  • 3.4 A Historical Perspective
  • 3.5 The Implications of the Global Financial Crisis: The Case of Hong Kong
  • 3.6 Implications for Transition and Developing Economies
  • References and Websites
Unit 4: Corporate Governance Around the World
  • 4.1 A Framework for Comparison
  • 4.2 Equity Market-based System vs Bank-led System
  • 4.3 Family-based Corporate Governance in Asia
  • 4.4 The Pyramid Structure and the Internal Capital Market
  • 4.5 Concluding Remarks
  • References and Websites
Unit 5: Board Composition and Control
  • 5.1 Board Composition and Control: Practical and Theoretical Trade-offs
  • 5.2 The Typical Anglo-American Board: Past and Present
  • 5.3 The Legal Framework Governing the Board
  • 5.4 The Board Management Relationship in Reality
  • 5.5 Director Selection
  • 5.7 Concluding Remarks
  • References and Websites
Unit 6: CEO Compensation
  • 6.1 Introduction: Major Challenges Faced by CEOs
  • 6.2 Why CEOs Fail
  • 6.3 An 'Ideal' CEO
  • 6.4 CEO Compensation and Employment Contract
  • 6.5 Stock Options
  • 6.6 Case Study: General Electric
  • 6.7 Concluding Remarks
  • References and Websites
Unit 7: International Governance
  • 7.1 Corporate Governance has Gone Global
  • 7.2 Why Do Companies List Abroad?
  • 7.3 Crisis-Driven Reforms in Emerging Markets
  • 7.4 Reforms in the Developed World
  • 7.5 The Case of Daimler Chrysler
  • 7.6 Concluding Remarks
  • References and Websites
Unit 8: Overview of Corporate Governance Codes
  • 8.1 The OECD Principles (1999-2004)
  • 8.2 The International Corporate Governance Network (ICGN) Principles
  • 8.3 Other Leading International Codes
  • 8.4 Reports on the Observance of Standards and Codes
  • 8.5 Concluding Remarks
  • References and Websites

Method of assessment

You will complete two assignments, which will be marked by your course tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 5, and the second assignment at the end of the course, on the Tuesday after Week 8. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Online Study Centre. You will also sit a three-hour examination on a specified date in October, worth 70% of your total mark. An up-to-date timetable of examinations is published in April of each year.