COMM 300: Corporate Governance

From BluWiki

Mechanisms of control

External

• Hostile takeovers
  • When managers devalue the firm, it's easier for someone to buy shares and do a hostile takeover
• Also, to a lesser extent:
  • Regulatory
    • Sarbanes-Oxley

Internal

• Board of Directors
  • Elected by the Shareholders
  • Serve as an oversight of the management
  • Set the pay of the CEO
    • Stock options, bonuses, etc
  • Hire/fire CEO
  • Decision making power
    • Vote on all major decisions of the company
    • Set the broad strategy of the company
  • Audit Committee works w/ company's auditors
• Shareholder voting / proxy voting?