lecture 6 corporate governance

8/11/2019 Lecture 6 Corporate Governance

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The Political Environment Part II

Corporate Governance

Prof. A. Contu

[email protected]
mailto:[email protected]:[email protected]


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http://www.accounting-degree.org/scandals/The

The Enron Scandal:

http://www.youtube.com/watch?v=-w6duQhWuVk

The CEO: Jeff Skilling

http://www.youtube.com/watch?v=XFTihsjO-og

The Enrons version of the free market

http://www.youtube.com/watch?v=2GdvKh3Gr3E

The Cost of Enron

http://www.youtube.com/watch?v=70XnlrwO7U4

http://www.youtube.com/watch?v=stwcqdk7C_w

http://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.html
http://www.accounting-degree.org/scandals/Thehttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=2GdvKh3Gr3Ehttp://www.youtube.com/watch?v=70XnlrwO7U4http://www.youtube.com/watch?v=stwcqdk7C_whttp://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.htmlhttp://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.htmlhttp://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.htmlhttp://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.htmlhttp://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.htmlhttp://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.htmlhttp://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.htmlhttp://documentaryaddict.com/Enron+The+Smartest+Guys+in+the+Room-766-documentary.htmlhttp://www.youtube.com/watch?v=stwcqdk7C_whttp://www.youtube.com/watch?v=70XnlrwO7U4http://www.youtube.com/watch?v=2GdvKh3Gr3Ehttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.youtube.com/watch?v=XFTihsjO-oghttp://www.accounting-degree.org/scandals/Thehttp://www.accounting-degree.org/scandals/Thehttp://www.accounting-degree.org/scandals/The


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Outline of the LectureWhat is Governance:

Definitions

Mapping the terrain of corporate governance

Key actors, key features and key issues

Current trends

Shareholder activism

From responsibility to accountability


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Definition of Corporate Governance

Usually understood as the process by which

shareholders seek to ensure that their corporation is

run according to their interests.

It includes processes of goal definition, supervision,control and sanctioning.

BUT: In the broader sense it includes all actors who

contribute to the achievements of the stakeholders

goals inside and outside of the corporation and theircontrol and monitoring.


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Different forms of governance

systems

Anglo-Saxon systems

Rhine Capitalism systems: eg Germany, Netherlands


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Key actorsBoard of Directors

Inside/executive directors: Chief Executive Officer charters the strategy ofthe company. It is desirable for the For the Chair of the Board to be separate

from the CEO

Outside/ non-executive directors

Aim of the board is to propose key strategic decisions for the company,including M&A and compensation levels.

Non for profit organization also have a board.


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A USA Example

Apples Board of Directors:

http://www.apple.com/pr/bios/

Apples Corporate Governance

http://investor.apple.com/corporate-governance.cfm

Apples Corporate Governance Guidelines:

http://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdf
http://www.apple.com/pr/bios/http://investor.apple.com/corporate-governance.cfmhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://files.shareholder.com/downloads/AAPL/2986465487x0x443011/6a7d49f1-a3af-4e69-b279-021b81a93cdf/governance_guidelines.pdfhttp://investor.apple.com/corporate-governance.cfmhttp://investor.apple.com/corporate-governance.cfmhttp://investor.apple.com/corporate-governance.cfmhttp://www.apple.com/pr/bios/


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In continental Europe: two tier system of co-determination

Upper-tier, Supervisory Board

Lower-tier : executive board overseeing the daily activities

Some members decided by workers; inclusion of directrepresentatives of stakeholders (e.g. workers and banks)

http://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-control
http://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-controlhttp://www.basf.com/group/corporate/en/investor-relations/corporate-governance/board/corporate-management-and-control


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External actors Auditors: accounting firms

Credit Rating Agencies

Stock Analysts & Brokers in the major investment financial institutions

They are to produce:

True and fair view of a company financial situation or a judgment of thetrustworthiness of an investment opportunity


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Shareholders Those who own the company shares

They invest to have a return either by increase share price or by getting dividends if paid

Individual/household shareholders/institutional shareholders: pension funds, collegeendowments, hedge funds, mutual funds, commercial banks, insurance companies,

Changing landscape:

Lower regulations of share transactions

Information & Communication Technology Changes

More professional brokers rather than individual, lone investors: brokers have incentives totrade shares more frequently than individuals do

1. in the 50s: household/individual shareholders owned 90% of the shares

2. Now (article published in 2009) institutional shareholders own 50% of the US stock and if oneincludes hedge funds and and foreign shareholders the figure is probably closer to 65-70%

Short-termism: An equity traded in the New York Stock Exchange in the 50s was held onaverage for about 7 years. Now it is held for about 6 months!

(see Fox and Lorsch, 2009)


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Locus of control: The myth that shareholders own the corporationand directors work is to maximise shareholders value Prof. Lynn

Stout, Cornell Law School

http://www.youtube.com/watch?v=6jJxGDM9mBg

http://www.nacdonline.org/AboutUs/?navItemNumber=513

General Issues
http://www.youtube.com/watch?v=6jJxGDM9mBghttp://www.youtube.com/watch?v=6jJxGDM9mBghttp://www.nacdonline.org/AboutUs/?navItemNumber=513http://www.nacdonline.org/AboutUs/?navItemNumber=513http://www.nacdonline.org/AboutUs/?navItemNumber=513http://www.nacdonline.org/AboutUs/?navItemNumber=513http://www.nacdonline.org/AboutUs/?navItemNumber=513http://www.nacdonline.org/AboutUs/?navItemNumber=513http://www.youtube.com/watch?v=6jJxGDM9mBghttp://www.youtube.com/watch?v=6jJxGDM9mBg


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Shareholders rightsThey have the right to the dividends if dividend are issued

They have claim on firms residual asset after all creditors are satisfied

The have the right to sell their shares

They have the right to vote at the general assembly

They have the right to submit shareholders resolutions

The by-laws in corporate charters will specify others

An issue of discipline:

Potential Conflict of Interest: how shareholders can check/control that directors are notfollowing their own interest rather than the corporation & shareholders' interest

Informational Asymmetry


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Discipline issueExecutive power:

Against hostile takeovers, i.e. bid to buy control of the corporation(start to be worried if above 20%) without consent of the Board(i.e. the Board does not agree with such change in stockownership)

Poison Pills are shareholders rights plans (to buy & sell) includein the by-laws designed to make the stock less attractive

If over 20% concentration then all other shareholders have option tbuy at discounted prices or for

Golden Parachutes severance packages worth millions.

Movement to take back the control of the board and address tprincipal agency dilemma:

High executive pay and share options


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BUT : unintended consequences of fuelling short term logicand favoring financialization

rather than economic and financial longevity of the corporation( i.e.be profitable; pay dividend and sell stock when return iswanted)

http://www.aflcio.org/Corporate-Watch/Paywatch-2014

As Fox and Lorcsh put it:

The statistical correlation between CEO pay and corporateperformance at S&P 500 companies is zero reports BaruchLev in his 2012 book Winning Investors Over.
http://www.aflcio.org/Corporate-Watch/Paywatch-2014http://www.aflcio.org/Corporate-Watch/Paywatch-2014http://www.aflcio.org/Corporate-Watch/Paywatch-2014http://www.aflcio.org/Corporate-Watch/Paywatch-2014http://www.aflcio.org/Corporate-Watch/Paywatch-2014http://www.aflcio.org/Corporate-Watch/Paywatch-2014


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Issues 2 Autonomy and Independence of Board of Directors,

especially the Non-Execs

Autonomy and independence of external agents:

Auditors, Stock Analysts impartiality Regulatory bodies


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Issues 3Corruption and Scandals: For example,

Insider trading

Accounting Frauds


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Trends1) Regulatory reforms

1) Shareholder activism

2) From Responsibility to Accountability


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ReformsRegulatory changes to reform corporate governance

In the USA: Sarbanes-Oxley (SOX) Act 2002 or

Public Company Accounting and Investor Protection Act:

Higher responsibilities for the role of board of directors on the accuracy of

financial statements Senior management must sign the accounts taking individual personal

responsibility for their accuracy (e.g. could not say I did not know!)

Higher independence of auditors (e.g. rotation, restriction on consultingcontracts, reporting requirements and certifications) and securitiesanalysts (requires disclosures of conflict of interest)

Tougher penalties for those found guilty

In Europe and other countries: new, constantly updated codes forcorporate governance


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Shareholder ActivismIf one refuses the option to Exit by selling the shares can

choose the option of Voice

Voice involves a direct engagement with the board

decisions which is within the owners of the shares

prerogatives and rights.

It can also involves class action lawsuits: way to counter

corporate fraud or potentially unlawful conduct that

damages their interest


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Shareholders Resolutions

Mostly for internal corporate governance issues:

For example, challenge anti-sharks measures, conflict

of interests, Exec Remuneration packages and links

with performance, etc.

But also used for raising social concerns and raise

social and environmental issues:

Climate change issues

Suppliers issues

Equal opportunity issues


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Latest Trends Development of socially responsible investment funds and

Investments in sustainable firms

Issues:

Quality and reliability of information

Dubious criteria

Mostly based on management policies not actual results and activities

So growing demand for accountability at all levels not only financial but also broadlyeconomic, environmental and social ------- Global Governance Issues and growingfinancial and non financial reporting

Accountability: a system that guarantees clarity of rules, structures and due process thatclarifies who is responsible for what and that shows in clear, traceable ways (i.e.accounts) corporate results on financial, social and environmental performance &impact.


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Case Study

Preparation and Required Reading Prior to Class:In March2014 Exxon agreed to publish a report on the risk of carbonassets. This came as a response to the shareholder resolutionpresented by You Sow and Arjuna Capital. You must find reliableinformation on this event putting together a brief case study forclass discussion. This includes:

Who are the stakeholders involved? What is the issue at stake?

When did this occur?

What was the content of the proposal?

Why was it issued?

What was Exxon response? In what ways is this related to corporate governance?

What is your opinion of the case specifically (did shareholderactivism work? Did it achieve its aims? Why are such actionsimportant?) and of corporate governance more generally?


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Some reputable sources on the issue

As You Sow | Engaging Corporations. Protecting People and Planet.."As You Sow. N.p., n.d. Web. 13 May 2014..

Landmark Agreement with Shareholders: ExxonMobil Agrees to Reporton Climate Change and Carbon Asset Risk." www.arjuna-capital.com. As You Sow/Arjuna Capital, n.d. Web. 10 May 2014. http://arjuna-capital.com/sites/default/files/Exxon%20CAR%20withdrawal%20release%2020140320%20FINAL.pdf.

IHS Energy 50 | IHS." IHS Energy 50 | IHS. IHS Inc., n.d. Web. 10 May 2014. .

Arjuna Capital."Arjuna Capital. N.p., n.d. Web. 10 May 2014. http://arjuna-capital.com/.

Exxon Report on Climate change: http://corporate.exxonmobil.com/en/environment/climate-change/managing-climate-change-

risks/carbon-asset-risk

Fahey, Jonathan. "Exxon: Highly unlikely world limits fossil fuels." Saloncom RSS. N.p., 31 Mar. 2014. Web. 10 May 2014.http://www.salon.com/2014/03/31/exxon_highly_unlikely_world_limits_fossil_fuels/ .

"Congressional Attacks on the Clean Air Act." US Climate Action Network. USCAN Climate Action Network, n.d. Web. 10 May 2014.http://www.usclimatenetwork.org/policy/dirty-air-act-amendment.

"Shareholder Resolutions." Ceres. N.p., n.d. Web. 10 May 2014. http://www.ceres.org/investor-network/resolutions.

Davenport, Coral. "Justices Back Rule Limiting Coal Pollution." The New York Times. The New York Times, 29 Apr.2014. Web. 10 May2014. http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0.

Vlasic, Bill. "U.S. Sets High Long-Term Fuel Efficiency Rules for Automakers." The New York Times. The New York Times, 27 Aug.2012. Web. 10 May 2014. http://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.html.

Naik, Gautam. "U.N. Climate Change Report Says Worst Scenarios Can Still Be Avoided." The Wall Street Journal. Dow Jones &Company, 13 Apr. 2014. Web. 13 May 2014.

.
http://arjuna-capital.com/sites/default/files/Exxon%20CAR%20withdrawal%20release%2020140320%20FINAL.pdfhttp://arjuna-capital.com/sites/default/files/Exxon%20CAR%20withdrawal%20release%2020140320%20FINAL.pdfhttp://arjuna-capital.com/sites/default/files/Exxon%20CAR%20withdrawal%20release%2020140320%20FINAL.pdfhttp://arjuna-capital.com/http://www.salon.com/2014/03/31/exxon_highly_unlikely_world_limits_fossil_fuels/http://www.salon.com/2014/03/31/exxon_highly_unlikely_world_limits_fossil_fuels/http://www.salon.com/2014/03/31/exxon_highly_unlikely_world_limits_fossil_fuels/http://www.salon.com/2014/03/31/exxon_highly_unlikely_world_limits_fossil_fuels/http://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.ceres.org/investor-network/resolutionshttp://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils-tighter-fuel-efficiency-standards.htmlhttp://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.nytimes.com/2014/04/30/us/politics/supreme-court-backs-epa-coal-pollution-rules.html?_r=0http://www.ceres.org/investor-network/resolutionshttp://www.ceres.org/investor-network/resolutionshttp://www.ceres.org/investor-network/resolutionshttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.usclimatenetwork.org/policy/dirty-air-act-amendmenthttp://www.salon.com/2014/03/31/exxon_highly_unlikely_world_limits_fossil_fuels/http://arjuna-capital.com/http://arjuna-capital.com/http://arjuna-capital.com/http://arjuna-capital.com/sites/default/files/Exxon%20CAR%20withdrawal%20release%2020140320%20FINAL.pdfhttp://arjuna-capital.com/sites/default/files/Exxon%20CAR%20withdrawal%20release%2020140320%20FINAL.pdfhttp://arjuna-capital.com/sites/default/files/Exxon%20CAR%20withdrawal%20release%2020140320%20FINAL.pdf


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Academic References

Hond, Frank Den, and Frank G. A. De Bakker. "Ideologically MotivatedActivism: How Activist Groups Influence Corporate Social Change Activities.."Academy of Management Review32.3 (2007): 901-924. Print.

Newell, Peter. "Civil Society, Corporate Accountability and the Politics ofClimate Change." Global Environmental Politics8.3 (2008): 122-153. Print.

Reid, Erin M., and Michael W. Toffel. "Responding to public and privatepolitics: corporate disclosure of climate change strategies." StrategicManagement Journal30.11 (2009): 1157-1178. Print.

"Carbon asset risk." ExxonMobil. N.p., n.d. Web. 10 May 2014..


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Conclusions Corporate Governance is of extreme significance because

of the agency problem

Failures in corporate governance can have seriousconsequences for investors, workers, suppliers and localand global communities

The trends are in:

higher regulation either rule-based and mandatory orbest-practice based.

Rising shareholder activism

And demands to move from responsibility to accountability

lecture 6 corporate governance

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