Boards 。一姜旻 温星星 ●
Boards •——姜旻 温星星
Brief Introductions Key Words: Board's Responsibilities Corporate Governance/Agency Problem Market Value (Share Price) Share price is often used as an index to reflect market value. According to relevant formulation,Firm's market value book value of assets- value of equity market value of equity. Share price can reflect the market value of equity herein. Hence,share price can be used as an index to reflect market value of the firm. Critical Questions as the mainstream: What should boards do How can boards do better--------From the perspective of board composition:Outside Directors Female Directors (Via empirical researches) ●
Brief Introductions Key Words: Board’s Responsibilities Corporate Governance/Agency Problem Market Value (Share Price) Share price is often used as an index to reElect market value. According to relevant formulation, Firm’s market value = book value of assets – value of equity + market value of equity. Share price can reElect the market value of equity herein. Hence, share price can be used as an index to reElect market value of the Eirm. Critical Questions as the mainstream: What should boards do How can boards do better --------From the perspective of board composition: Outside Directors & Female Directors (Via empirical researches)
What Should Boards Do OECD Principles of Corporate Governance What is this? Principle VI.The Responsibilities of the Board "The corporate governance framework should ensure the strategic guidance of the company,the effective monitoring of management by the board,and the board's accountability to the company and the shareholders. Two Separate Responsibilities Strategy-setting effective monitoring of management Additional Accountability Provision: Accountability to the company and the shareholders ●
What Should Boards Do OECD Principles of Corporate Governance Principle VI. The Responsibilities of the Board “The corporate governance framework should ensure the strategic guidance of the company, the effective monitoring of management by the board, and the board’s accountability to the company and the shareholders. ” Two Separate Responsibilities : Strategy-setting & effective monitoring of management Additional Accountability Provision: Accountability to the company and the shareholders What is this?
OECD Principles Although these principles do not have any binding force of law. However, (1)these principles do reflect a universal consensus .(2)these principles have a tremendous impact on legal reforms of corporate governance. Hence,these principles should be treated as a sort of universal declaration of board's responsibilities. ● ●
OECD Principles • Although these principles do not have any binding force of law. • However, • (1) these principles do reElect a universal consensus • (2) these principles have a tremendous impact on legal reforms of corporate governance . • Hence, these principles should be treated as a sort of universal declaration of board’s responsibilities
Agency Cost/Problem Agency problem:both in monitoring and strategy-setting larger as a corporate challenge Possibilities of Looting Shirking Solutions:Fiduciary Duty,Executive Compensation... Looting:extracting value from the company and the shareholders beyond previously agreed level Shrinking:failing to exert one's best try for the interest of the company ●
Agency Cost/Problem Agency problem: both in monitoring and strategy-setting larger as a corporate challenge Possibilities of Looting & Shirking Solutions：Fiduciary Duty, Executive Compensation... Looting: extracting value from the company and the shareholders beyond previously agreed level Shrinking: failing to exert one’s best try for the interest of the company