The mechanisms and procedures that determine how corporations are run.
The costs associated with managing the relationship between agent & principal
A board committee that, in conjunction with the corporations external auditors, oversees preparation and dissemination of the corporations financial statements.
A Board committee that determines compensation arrangements for the CEO and other senior managers.
Nominations/corporate governance committee
A Board committee that recommends nominees for election to the board by the shareholders and, in many corporations establishes corporate covernance guidelines.
linking managers compensation to the corporate economic performance
Holding decision makers liable to shareholders for any harm from their decisions
management concern about making decisions that do not increase the corporations economic value and that can develop poor reputations for managers
Management concern about the probability that another corporation will acquire their corporation
Goal of Shareholders
Goals of non investor stakeholders (employees, customers, suppliers, lenders, and members of the public
a board committee that in conjunction with the corporations external auditors, oversees the preparation and dissemination of the corporations financial statements. (outside directors only)
A Board committee determines compensation for the CEO an other senior managers (outside directors only)
Nominations/Corporate Governance Committee
A board committee that recommends nominees for election tot he board by the shareholders, and in many corporations, establishes governance guidelines (can be both inside & outside directors)
Major Responsibilities of Corp Directors
-establish the basic objectives and broad policies of the corp.
-elect or appoint the corp officers , advise them, approve their actions, and audit their performance
-safeguard and approve changes in the corporate assets
approve important financial matters & see that the proper annual & interim reports are given to shareholders
-delegate special powers to others to sign contracts, open bank accounts sign checks, issue stock, contracts, open bank accounts, sign checks, issue stock, make loans & conduct any activities that may require board approval
-maintain, revise & enforce corp charter & bylaws
_perpetuate a competent board thru regular elections & filling interim vacancies with qualified persons
-act as a fiduciary in their relationship to the corp & its shareholders
Duty of Care
exercise good faith & reasonable care in supervising corp activities
Duty of Loyalty
place the corporations interests above own personal interests in financial or other gain
Duty of Disclosure
disclose material facts to all who have a right to know such facts and would not otherwise be able to obtain them.
Duty of Obedience
perform duties according to the statutes and the terms of the corporate charter