Corporate Governance

This module, Corporate Governance, is specially designed for the postgraduate study of such areas as management, finance, financial law, corporate law, economics and related subjects. The module is designed to increase the depth of your understanding of corporate governance issues. As corporate governance is a multi-disciplinary subject – covering such topics as law, politics, management, finance, and economics – you will find that the module will add to previous study of any of these disciplines. A previous knowledge of corporate governance is not required.

Upon successful completion of this module, it is hoped that students with a variety of backgrounds will understand the key elements of corporate governance and its importance to the international economy. In order to achieve this, a strong emphasis is placed on the relationship between theoretical concepts and real world issues. It is therefore hoped that the module can make a real contribution to your in-depth understanding of the relevant corporate governance issues.

Learning outcomes

When you have completed your study of this module 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.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is 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 assigned readings.
• Key texts: Monks RAG & N Minow (2011) Corporate Governance. 5th Edition. New York, Wiley.
  Hansmann H (2000) The Ownership of Enterprises. Cambridge MA, The Belknap Press of Harvard University.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

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

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

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 Implications for Transition and Developing Economies

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

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

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

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

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

Module samples

• M444 Module Introduction (PDF)
• M444 Specimen Examination (PDF)
• M444 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules