Transparency has become a key objective of corporations and a pressing demand of shareholders, many of whom have seen their fortunes slip away because of financial irregularities and hyperinflated stock prices.
And the best way to ensure that shareholders have a clear, accurate picture of a corporation's financial health is to ensure the soundness of its corporate governance--the complex policies and procedures that dictate the relationships between shareholders, boards of directors, CEOs, managers and employees, customers, suppliers, creditors, and more.
Advocating a market-based corporate governance system based on maximizing shareholder wealth--but packed with safeguards to counter the effects of greed and incompetence--A Blueprint for Corporate Governance helps link each activity, whether it's pricing models, financial reporting, or dividend structure, to the crucial question: Does it increase shareholder wealth?
Packed with real-world examples, academic research, and statistical data, A Blueprint for Corporate Governance is the first complete, authoritative guide to bring together a state-of-the-art overview of governance practices with a detailed plan for helping managers, executives, and boards of directors focus their activities on building value for the shareholder.
Table of Contents
- Chapter 1: Corporate Governance: An Overview
- Chapter 2: The Governance Structure of American Corporations
Chapter 3: Markets: Can You Trust Them?
- Financial Market Efficiency
- Market Inefficiencies and Anomalies
- What Market Efficiency Means for Managers and Governance
- Transparency and Market Efficiency
- Chapter 4: Valuation
Chapter 5: Corporate Governance Issues in Investment Decisions
- The NPV Rule
- Do Investors Behave as Predicted by the NPV Rule?
- Implication of the NPV Rule for Internal Allocation of Capital
- Legitimate and Illegitimate Criticisms of the NPV Rule
Chapter 6: Corporate Governance Issues and the Financing Decision
- The Setup
- Bank Debt Versus Public Debt
- Does Where You Raise Funds Matter?
Chapter 7: Corporate Governance Dividend Issues
- The Setup: Why Pay Cash Dividends?
- Solving Informational Asymmetry Problems
- Dividends, Free Cash Flow, and Conflicts of Interest
- Dividends, Taxes, and Share Repurchases
- An Example of Disgorging Cash: Ford Motor Company
- Explicit Free Cash Flow Dividend/Share Repurchase Policies
Chapter 8: Corporate Governance and Managerial Compensation
- The Problem
- Measuring Effort and Performance
Common Pay and Performance Schemes
- Base Salary Examples
- Short-Term Incentive Plans
- Short-Term Incentive Examples
- Problems With Short-Term Incentive Plans
- Long-Term Incentive Plans
- Examples of Long-Term Incentive Plans
- Problems with Stock Option and Restricted Stock Plans
- EVA®: A Very Popular Compensation Plan and Corporate Governance Metric
- The Evidence About Pay and Performance
- Pay and Performance in
Chapter 9: The Corporate Control Market
- Why a Corporate Control Market?
- Mergers and Acquisitions
- Divestitures, Spin-Offs, and Carve-Outs
- Going Public: IPOs
- LBOs and MBOs
Chapter 10: The Board of Directors and Shareholders Rights
- A Historical Perspective
- Composition and Compensation of the Board of Directors
- The CEO and the Board Chair
- Shareholder Rights
- Poison Pills, Supermajority Rules, and Greenmail
- Board Governance and Firm Performance
Chapter 11: Alternative Governance Systems: Germany and Japan
- The German System
- Universal Banking: A German Governance Solution
- What’s the Evidence with Respect to Germany?
- The Japanese Keiretsu
- A Critique of the Keiretsu
- Convergence or Diversity?
- OECD Principles of Corporate Governance
- About the Author
- Title: A Blueprint for Corporate Governance
- Release date: February 2003
- Publisher(s): AMACOM
- ISBN: 9780814426982