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Corporate Governance

Objectives

The goal of this course is to provide an applied perspective on how to create value by determining corporate governance arrangements. It relies on both lectures and in class discussions of the assigned topics. Students are expected to participate intensely in the discussions, to come fully prepared to class, having covered all readings and thoroughly discussed assigned cases.

Questions that the course will address are the following: What do investors want about corporate governance decisions? What governance arrangements are helpful in creating value and making sure value accrues to the investors? What countries provide better governance arrangements that allow entrepreneurs and firms to raise more money to realize profitable projects? How should managers be incentivized and compensated? Should an investor sell his shares if unhappy with the company (‘Wall Street Walk’) or become an activist? How do shareholder and bondholders view governance differently and what happens in unsolicited takeovers? The course also highlights recent failures of corporate governance and what we can learn from them.

General characterization

Code

2217

Credits

3,5

Responsible teacher

António Nogueira Leite

Hours

Weekly - Available soon

Total - Available soon

Teaching language

English

Prerequisites


Bibliography

The course does not follow any available textbook. Subjects were selected based on the instructor’s assessment of the relevance of the issue and the adequacy to the profile of students likely to enroll. Any of the following major corporate governance textbooks can be used to provide extra background on the different topics.

  • 1. Robert Monks and Nell Minow, Corporate Governance, Fourth Edition, John Wiley and Sons, (2008).

  • 2. Brian Coyle, Corporate Governance Essentials, ICSA Publishing, (2008).

  • 3. Kenneth A. Kim and John R. Nofsinger, Corporate Governance, second Edition, Person International Edition, (2007).

Teaching method

The course involves lectures, class discussions and case discussions. Lectures and discussions are based on pre-assigned readings and cases.

Students will organize themselves in groups of 4/5 people. Each group has to prepare one of the cases mentioned in the Program. Each case will be discussed in class. In every discussion there will be a group assigned to present its answers to the questions pertaining to the respective case and another one (or two) will have to discuss the oral presentation of the first group. The Schedule of presentations will beset at the end of the first week of classes.

Evaluation method

  • Grades will be based on the following: Team project (30%)

  • Final exam: (30%)

  • Class participation and written assignments: (40%)

Subject matter

  • 1. Corporations and Corporate Governance:

    1.1. The historical perspective;

    1.2. International experience;

    1.3. The agency theory of corporate governance;

    1.4. Managerial primacy, shareholder primacy and board primacy;

  • 2. Board of Directors:

    2.1. Composition;

    2.2. Nomination;

    2.3. Executive Compensation;

  • 3. Shareholders:

    3.1. Majority shareholders, minorities;

    3.2. Shareholders activism;

  • 4. Third Parties:

    4.1. Accountants and auditors;

    4.2. Financial Reporting, Analysts and Investment Banks;

    4.3. Creditors and Credit Rating Agencies;

  • 5. Mergers and Acquisitions and Takeover Defenses for unsolicited takeovers.