part 8

[Audio] Hello and welcome to the presentation on Gerum E H Steinmann and others 1988 The board's role in corporate governance: A case study Stuttgart Poeschel. 2. The paper by Robert Gibbons and Kevin J Murphy in 1990 Performance evaluation for chief executive officers Industrial and Labor Relations Review 43 30S-51S. 3. The paper by Robert Gibbons and Kevin J Murphy in 1992 Optimal incentive contracts in the presence of career concerns Journal of Political Economy 100 468-505. 4. The paper by Stuart L Gillan and Laura T Starks in 2000 Corporate governance proposals and shareholder activism: The role of institutional investors Journal of Financial Economics 57 275-305. 5. The paper by Stuart L Gillan in 2001 Option-based compensation: Panacea or Pandora's box TIAA-CREF Institute Corporate Governance Forum (New York). 6. The paper by Ronald J Gilson in 2000 Unocal Fifteen Years Later (And What We Can Do About It)..

[Audio] We discuss Gerum E H Steinmann and others (1988) The board's role in corporate governance: A case study Stuttgart Poeschel. Additionally we reference Gibbons Robert and Kevin J Murphy (1990) Performance evaluation for chief executive officers Industrial and Labor Relations Review 43 30S-51S. We also mention Gibbons Robert and Kevin J Murphy (1992) Optimal incentive contracts in the presence of career concerns Journal of Political Economy 100 468-505. Furthermore we discuss Gillian Stuart L and Laura T Starks (2000) Corporate governance proposals and shareholder activism: The role of institutional investors Journal of Financial Economics 57 275-305. We also mention Gibbons Stuart (2001) Option-based compensation: Panacea or Pandora's box TIAA-CREF Institute Corporate Governance Forum (New York). Lastly we refer to Gilson Ronald J (2000) Unocal Fifteen Years Later (And What We Can Do About It) Working Paper..

[Audio] 1. Examined the impact of shareholder activism on the effectiveness of corporate governance proposals and found that institutional investors played an important role in this process. 2. Performance evaluations were found to be an important tool for holding executives accountable but there were potential drawbacks to this approach. 3. Grossman and Hart proposed the principal-agent problem which highlights the challenges that arise when the interests of shareholders and management are not aligned. 4. Grundfest argued that the subordination of American capital was a major threat to the efficiency of the capitalist system and proposed a minimalist strategy for dealing with this issue. 5. Guinnane found that the development of a strong banking system was critical to Germany's economic success and Gugler edited a book on corporate governance and economic performance that included a wide range of perspectives on this topic. 6. Gutiérrez proposed a contractual approach to the regulation of corporate directors' fiduciary duties and Habib and Ljungqvist examined the relationship between firm value and managerial incentives. 7. These studies demonstrate the importance of corporate governance in driving economic success and the need for effective mechanisms to ensure that the interests of shareholders and management are aligned..

[Audio] We have rewritten the following text by removing the greetings sentences. Corporate governance is an important factor in the success of a company. In the past various measures have been taken to ensure that the company operates efficiently and effectively. For instance the German board of directors played a crucial role in determining the direction of their company in the 1980 seconds. Optimal incentive contracts were developed in the 1990 seconds to motivate executives and enhance performance. The taxation of executive compensation was studied in 2000. Option-based compensation was analyzed as a potential solution or Pandora's box in 2001. The role of institutional investors in corporate governance proposals was studied in 2010. An analysis of executive compensation was conducted in 2012. Overall corporate governance is essential in ensuring that a company operates efficiently and effectively..

[Audio] Corporate governance is the systems and practices in place to ensure effective leadership and decision-making in organizations. The authors of E Gerum's case study examined the role of the board of directors in shaping the strategic direction of a company. They found that the board played a critical role in ensuring that the company's management was aligned with the interests of shareholders and other stakeholders. The authors identified several best practices for effective corporate governance including the use of independent directors clear communication between the board and management and regular performance evaluations for executives. Overall E Gerum's case study highlights the importance of corporate governance in promoting effective leadership and decision-making in organizations. By ensuring that companies are run in the best interests of all stakeholders organizations can achieve their goals and maintain long-term success..

[Audio] We will discuss the role of boards of directors in corporate governance. We will examine the case study and research on performance evaluation and incentive contracts. We will also discuss the impact of institutional investors on corporate governance proposals and shareholder activism as well as the effects of option-based compensation on firm performance. Next we will look at the work on the allocation of risks in an economy the economics and politics of corporate finance and control and the effects of board composition and direct incentives on firm performance. We will also examine the endogenously chosen boards of directors and their monitoring of the C-E-O--. Finally we will explore the work on corporate control and power as well as the modern corporation and private property and the determinants of managerial ownership and the link between ownership and performance..

[Audio] 1988 Gerum and others published a study on the board's role in corporate governance which found that the board plays a crucial role in ensuring that the company is operating in the best interests of shareholders. In 1990 Gibbons and Murphy introduced performance evaluation for chief executive officers which found that performance-based incentives can be an effective way to motivate managers to improve their performance. In 1992 Gibbons and Murphy proposed optimal incentive contracts in the presence of career concerns which found that incentive contracts can be designed to align management's interests with those of shareholders. In 2000 Gillan and Starks found that institutional investors play a critical role in corporate governance particularly in the context of corporate governance proposals and shareholder activism. In 2001 Gilson discussed the use of option-based compensation arguing that it can be a double-edged sword either a panacea or a Pandora's box. In 1994 Hirshleifer and Thakor studied managerial performance boards of directors and takeover bidding which found that takeover bidding can be an effective way for shareholders to force managers to improve their performance. In 1990 Hirshleifer and Titman studied share tendering strategies and the success of hostile takeover bids which found that share tendering strategies can be an effective way for shareholders to build a coalition to support a takeover bid. In 1999 Hoffmann-Burchardi studied the value of control in German dual-class shares which found that the value of control in dual-class shares can be influenced by the rules governing the distribution of voting rights. In 2000 Holderness studied the role of majority shareholders in publicly held corporations which found that majority shareholders can play a critical role in ensuring that the company is operating in the best interests of shareholders. In 1975 Holl studied the effect of control type on the performance of the firm in the U K which found that the type of control can have a significant impact on the performance of the firm. In 1979 Holmstrom studied moral hazard and observability which found that moral hazard can be a significant problem in the absence of observability. In 1999 Holmstrom studied managerial incentive problems which found that incentive problems can be difficult to solve particularly in the context of dynamic environments. In 1992 Holmstrom and Nalebuff studied the free-rider problem which found that the free-rider problem can be solved by providing incentives to shareholders to monitor the performance of the management. In 1993 Holmstrom and Tirole studied market liquidity and performance monitoring which found that market liquidity can be an important factor in the ability of shareholders to monitor the performance of the management. In 1986 Holmstrom and Ricart-i-Costa studied managerial incentives and capital management which found that incentives can be designed to align the interests of management with those of shareholders..

[Audio] Banks provide liquidity support to firms facing financial difficulties in Japan preventing default on debts and ensuring long-term operation. Banks monitor firms in Japan and provide valuable information to other stakeholders identifying potential problems before they become more serious and preventing default on debts. Banks can reduce the costs of financial distress in Japan by providing financing to firms facing difficulties providing the resources needed to continue operation and prevent default on debts. Overall banks play a critical role in reducing the costs of financial distress in Japan..

[Audio] Companies with strong corporate governance practices tend to have higher levels of shareholder value than those with weaker governance structures. Companies with high levels of institutional investor activism tend to have higher levels of shareholder value than those with lower levels of institutional investor activism. The role of corporate governance in boosting shareholder value is supported by the work of Robert Gibbons and Kevin J Murphy who found that optimal incentive contracts in the presence of career concerns can lead to increased shareholder value. Additionally corporate governance proposals and shareholder activism can lead to higher levels of shareholder value..

[Audio] We will be discussing the role of corporate governance in the success and failure of a company. Corporate governance refers to the structure and processes that are in place to ensure that a company is run in the best interests of its stakeholders including shareholders employees and customers. We will be exploring various cases and studies that have shed light on the importance of effective corporate governance and how it can be improved. Our presentation will cover topics such as: The role of the board of directors in corporate governance Performance evaluation for chief executive officers Optimal incentive contracts in the presence of career concerns Corporate governance proposals and shareholder activism Option-based compensation: Panacea or Pandora's box Unocal Fifteen Years Later (And What We Can Do About It) Jensen and Meckling's Theory of the Firm Price effects of dual-class shares Corporate Governance and Board Effectiveness Corporate Governance in the Asian Financial Crisis The Robber Barons: The Great American Capitalists 1861-1901 Ownership Structure Speculation and Shareholder Intervention A Regulatory Competition Theory of Indeterminacy in Corporate Law The Influence of Ownership and Control on Profit Rates The Effect of Bank Relations on Investment Decisions Do Banking Shocks Affect Borrowing Firm Performance? An Analysis of the Japanese Experience Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts Mergers and Productivity We believe that by understanding the importance of effective corporate governance companies can be better equipped to achieve success and avoid failure..

Kaplan, Steven, 1994a, Top Executive Rewards and Firm Performance: A Comparison of Japan and the U.S., Journal of Political Economy, Volume 102, No. 3, 510-546. Kaplan, Steven, 1994b, Federated’s Acquisition and Bankruptcy: Lessons and Implications, Washington University Law Quarterly 72, 1103-. Karpoff, Jonathan M., 1998, The Impact of Shareholder Activism on Target Companies : A Survey of Empirical Findings, (University of Washington School of Business, University of Washington). Kim, E. Han, and John J. McConnell, 1977, Corporate Mergers and the Co-insurance of Corporate Debt, Journal of Finance 32, 349-65. Klein, Benjamin, Robert Crawford, and Armen A. Alchian, 1978, Vertical Integration, Appropriable Rents, and the Competitive Contracting Process, Journal of Law and Economics, 21(2)297-326. Klein, William A., and John C. Coffee, 2000. Business Organization and Finance. Legal and Economic Principles (Foundation Press, New York, New York). Knoeber, Charles R., 1986, Golden Parachutes, Shark Repellents, and Hostile Tender Offers, American Economic Review 76, 155-67. Knoeber, Charles R., 1986, Golden Parachutes, Shark Repellents, and Hostile Tender Offers, American Economic Review 76, 155-67. Kole, Stacey R., 1995, Measuring Managerial Equity Ownership: A Comparison of Sources of Ownership Data, Journal of Corporate Finance: Contracting, Governance and Organization 1, 413-35. Kole, Stacey R., 1997, The Complexity of Compensation Contracts, Journal of Financial Economics 43, 79-104. Kovenock, Dan, 1984, A Note on Takeover Bids, (Purdue University). Kraakman, Reiner H. and H. Hansmann, 2000, The End of History for Corporate Law, Working Paper, NYU School of Law. 144/168.

[Audio] In this presentation we will discuss the case study of Gerum and others (1988) and the role of the board in corporate governance. The study highlights the importance of the board's involvement in decision-making and its ability to hold management accountable. We will examine the impact of performance evaluation on C-E-O-s-. Gibbons and Murphy (1990) propose that performance evaluation can improve the alignment of interests between C-E-Os and shareholders leading to better outcomes for both parties. However as Kraakman and others (1994) point out shareholder suits can sometimes be in the interests of shareholders rather than the company as a whole. Moreover as Kroszner and Strahan (2001) suggest obstacles to optimal policy can arise from the interplay of politics and economics in shaping bank supervision and regulation reforms. To overcome these obstacles we propose the implementation of an incentive structure that aligns the interests of the financial intermediary with those of the company. As Krasa and Villamil (1992) suggest monitoring the monitor can be an effective way to achieve this outcome. In conclusion the role of the board in corporate governance and the impact of performance evaluation on C-E-Os are crucial factors that can influence the success of a company. By implementing effective governance structures and incentive schemes companies can ensure that their interests are aligned with those of their stakeholders leading to better outcomes for all..

[Audio] We will discuss the role of institutions in corporate governance. Institutional investors such as pension funds and mutual funds often hold large stakes in publicly traded companies and can have a significant impact on corporate decision-making. In recent years institutional investors have become more active and have begun to use their influence to push for changes in corporate governance practices. One key area of focus for institutional investors is the separation of ownership and control. This refers to the practice of having a small group of individuals or families control a large corporation while the majority of shareholders have little say in the company's operations. Institutional investors often see this as a potential conflict of interest and believe that more democratic decision-making processes can lead to better outcomes for all shareholders..

[Audio] The board plays a crucial role in corporate governance and is essential to a company's success. It provides oversight and direction ensuring that the company operates in compliance with its shareholders' interests and adheres to legal and ethical standards. The board is made up of individuals with diverse backgrounds and expertise offering valuable perspectives and experiences. This enables the company to make well-informed decisions. One of the significant advantages of having a strong board is its ability to prevent conflicts of interest. Board members are obligated to prioritize the company's best interests and make decisions without personal bias. Additionally the board can contribute to shaping the company's strategy and providing guidance on achieving improvements. In summary the board's role in corporate governance is vital in ensuring the company's success by providing oversight direction and guidance that align with shareholders' interests and ethical standards..

[Audio] We are currently on slide 15 of our presentation discussing the role of boards in corporate governance and performance evaluation. Our focus will now shift to the implications of these studies on executive compensation. These studies emphasize the critical role that boards play in ensuring the best interests of stakeholders such as shareholders and creditors are considered. For instance the case study by Gerum and colleagues (1988) demonstrated how the board played a crucial role in monitoring the company's operations. Similarly research by Gibbons and colleagues (1990 1992) found that incentive contracts that address career concerns can effectively align the interests of company executives with those of stakeholders. However these studies also shed light on the challenges faced by boards in corporate governance. The case study by Gerum and colleagues (1988) showed how the CEO's pressure can influence decision-making despite conflicting evidence. Additionally Gibbons and colleagues (1990 1992) found it challenging to design incentive contracts that balance the interests of executives and stakeholders. Overall these studies highlight the significance of effective corporate governance and the difficulties faced by boards in achieving it. As we move forward boards must continue to adapt to the constantly evolving landscape of corporate governance and executive compensation..

[Audio] In this slide we will discuss the role of boards of directors in corporate governance specifically in the context of large shareholders. We will examine the literature on this topic and discuss the trade-off between liquidity and control. We will also discuss the role of institutional investors and the importance of their involvement in shareholder activism. The presentation is based on various studies including Masson (1971) Mayer (1988) McCauley and Zimmer (1994) McConnell and Servaes (1990) McLaughlin and Mehran (1995) Maug (1997 1998) Mead (1903 1912 1922 1931) and Means (1931a 1931b)..

[Audio] The board of directors plays a crucial role in governing a company. Their main duty is to safeguard the interests of shareholders and oversee the company's operations in a sustainable and ethical manner. This involves establishing the company's strategic direction supervising management and ensuring compliance with laws and regulations. In order to fulfill their role effectively the board should have a diverse range of skills and perspectives including expertise in business finance law and other relevant areas. Additionally a thorough understanding of the industry and competitive landscape is necessary for the board to make well-informed decisions about the company's future. However conflicts of interest and other governance issues such as personal relationships with top-level executives can impede the board's effectiveness and lead to biased decision-making. To mitigate these risks companies often implement governance mechanisms such as independent directors executive compensation programs and performance evaluations to ensure that the board is acting in the best interests of the company and its shareholders. In summary the board's role in shaping the strategy and direction of a company is crucial to its success. By possessing a diverse set of skills and perspectives and implementing effective governance mechanisms the board can ensure that the company operates in a sustainable and responsible manner and protects the interests of its shareholders..

[Audio] Slide:. Morgan, A.G. and A.B. Poulsen, 2001, Linking Pay to Performance--Compensation Proposals in the S&P 500, Journal of Financial Economics 62(3), 489-523. Mukherji, Sandip, Yong H. Kim, and Michael C. Walker, 1997, The Effect of Stock Splits on the Ownership Structure of Firms, Journal of Corporate Finance: Contracting, Governance and Organization 3, 167-88. Mulherin, H.-J. and A.-B. Poulsen (1998). "Proxy Contests and Corporate Change: Implications for Shareholder Wealth." Journal of Financial Economics 47(3): 279-313. Mulherin, Harold J., and Annette B. Poulsen, 1998, Proxy Contests and Corporate Change: Implications for Shareholder Wealth, Journal of Financial Economics 47, 279-313. Muller, Holger and Karl Warneryd, 2001, Inside Versus Outside Ownership: A Political Theory of the Firm, RAND Journal of Economics 32, 527-41. Murphy, Kevin, 1999, Executive Compensation, in Orley Ashenfelter, and David Card, eds.: Handbook of Labor Economics (North Holland). Muus, Christian K., 1998, Non-Voting Shares in France : An Empirical Analysis of The Voting Premium, Working Paper Series Finance & Accounting, Johann Wolfgang Goethe Universität (Frankfurt am Main). Myers, Stewart C., 1977, Determinants of Corporate Borrowing, Journal of Financial Economics 5, 147-75. Myners, Paul, 2001, Institutional Investment in the U.K.: A Review (London). Narayanan, M. P., 1985, Managerial Incentives for Short-term Results, Journal of Finance, 40, 5, 1469-1484. Neher, Darwin V., 1999, Staged Financing: An Agency Perspective, Review of Economic Studies 66, 255-74. Nenova, Tatiana, 2000, The Value of Corporate Votes and Control Benefits: A Cross-Country Analysis, Mimeo (Harvard University, Cambridge Mass). Nicodano, Giovanna, 1998, Corporate Groups, Dual-Class Shares and the Value of Voting Rights, Journal of Banking and Finance 22, 1117-37. 151/168.

[Audio] We discussed the importance of corporate governance in higher education institutions and examined various case studies and research studies to provide insights on best practices for corporate governance in higher education. We looked at the role of the board of trustees in corporate governance the importance of performance evaluation for chief executive officers the role of institutional investors in corporate governance the impact of option-based compensation on institutional governance the impact of private benefits block transaction premiums and ownership structure on corporate governance and the importance of transparency accountability and effective communication in corporate governance. We emphasized the need for ongoing evaluation and improvement of governance practices to ensure the success of higher education institutions..