The class "Corporate Governance and Responsible Business Practices" focuses on the relationships between a company’s owners, its management, its board, and other stakeholders. Special emphasis is put on agency problems that arise from the separation of ownership and control, particularly in large companies with diffuse ownership. One way to address these agency problems is through the installment of boards of directors. The course outlines the functions of the board, gives an overview of board structures and compositions in different countries, and provides an in-depth assessment how different board characteristics relate to performance. Another way to deal with agency problems is managerial incentives and compensation packages. The class discusses different types of incentives and their advantages and disadvantages. Next to these internal governance mechanisms we also discuss external governance mechanisms, for example, shareholder activism, anti-takeover provisions, or governance codes. Although the focus is on the shareholder-oriented model, one that is today best exemplified by the large Anglo-American public firm, considerable attention is given to institutional differences in international corporate governance.

The class further pays special attention to the interplay between corporations and their diverse stakeholders (e.g., employees, owners, creditors, environment, local community) and how stakeholder relations are associated with shareholder value.

Kurs im HIS-LSF