Corporate Governance

Course Description:
This course provides a brief overview to a complex area of corporate governance for MBA students. Corporate governance is the relationship among various participants in determining the direction and performance of corporations, including shareholders, management, directors, employees, customers and other stakeholders. The aim of this course is to provide a clear description for the managers and executives that will enable them to identify the practical steps necessary to meet todays corporate governance requirements.

Prerequisites:
None, because this course is designed for general managers who have never got involved with corporate governance. Corporate governance is an open topic for everyone. If needed, the related knowledge will be explained in the course in most understandable way.

Textbook and Readings:

Textbooks: Corporate Governance, Robert A. G. Monks and Nell Minow, Wiley-Blackwell Publishing, 4nd Edition, 2008, ISBN-10: 1405171065, ISBN-13: 978-1405171069

Reference books and Cases: 1Corporate Governance, Kenneth A. Kim and John R. Nofsinger, Pearson, 2nd edition, ISBN: 0-13-173534-9 2 2006 9 ISBN: 7-80087-783-3 3 2004 2 ISBN: 7-80190-113-4 4Case binder will be provided in due time.

Course Administration:
1Class attendance: Students should attend class consistently, since important material is covered in class that is not in the readings. Absences and lateness will be considered in grading. 2Group study and class participation: All students are expected to participate in class discussion. Participation will be evaluated and will be counted into finial grading. 3Cell phones and laptops can be distracting to others and are not allowed in class.

Grading:
Participation Course work case studies and in-class discussions 20% 30%+20%

Take-home Final Exam 30% You are requested to form groups of 4 or 5 students during the first two weeks of class. Each group will answer a set of questions related to the case studies we use in class in a written report due on the day we discuss the case in class. The grades for cases will count for 30% of your grading. The remaining 20% can be earned through your participation in class.

Course Schedule:
Week 1 Topic Readings and cases Course overview, Introduction to Corporate Introduction of textbook; Chapter 1 of Governance reference book 1 Case studyInnovation Corrupted: The Rise and Fall of Enron(HBS9904036) What is Corporation? Chapter 1 of textbook; Case studySalomon v. Salomon & Co Ltd Imperial Chemical Industries Plc Chrysler Shareholders: Ownership Chapter 2 of textbook; Chapter 7 of reference book 1; Chapter 6 of reference book 2 Case study Shareholder Activists at Friendly Ice Cream(HBS 9109014) Chinese case PetroChina Section 1 Monitoring Duties of Board of Chapter 3 of textbook; Chapter 4 of Directors reference book 1; Chapter 5 of reference Section 2 The Board and Strategy book 2 Case study Redefining the Role of Outside Directors in An Age of Global Competition the Board of Directors at Morgan Stanley Dean Witter(HBS 405105) Case study Delphi Corporation(HBS 402033) Management: Performance Chapter 4 of textbook; Chapter 2 of reference book 1; Chapter 3 of reference book 2 Case studyExecutive Remuneration at Reckitt Benckiser plc CEO Evaluation at Dayton Hudson Chapter 5 of textbook; Chapter 10 of reference book 2 Case study Corporate Governance in the U.S.: Scandals, Reforms, and the Future Aspects of Japanese

International Corporate Governance

Governance Reform

Corporate Takeovers: a Governance Mechanism

Corporate Social Responsibility

Chapter 8 of reference book 1; Chapter 7 of reference book 2; Part 3&4 of reference book 3 Case studyM&A legal context: Basic framework for corporate governance(HBS case 9803200) Ten questions raised by Paramount Time/Warner: The Delaware Supreme Court Speaks Chapter 11 of reference book 1; Chapter 8 of reference book 2 Corporate social responsibility, corporate governance, and financial performance(Business Horizons, 2008,51,pp.535-540) Corporate citizenship at American Express

Course Outline:
Session 1: Course overview, Introduction to Corporate Governance Contents: What is the purpose of this course? What is corporate governance? What we can get from this course? What we can learn from the fall of Enron? Course Material: Lecture notes; Introduction of textbook; Chapter 1 of reference book 1 Case studyInnovation Corrupted: The Rise and Fall of Enron

Session2: What is corporation? Contents: What are the three basic forms of business ownership? What are the advantage and disadvantage to each? How to understand the corporation as a person? What is corporate crime? How to understand the relationship between corporation and government? How to measure the performance of corporation? How to tell Good Corporation and Bad Corporation? Course Material: Lecture notes; Chapter 1 of textbook; Case studySalomon v. Salomon & Co Ltd Imperial Chemical Industries Plc Chrysler

Session 3 Shareholder: Ownership Contents: What problem with traditional notions of ownership was the corporate form intended to solve? How are the ownership and control separated in modern corporation? How does that separation lead to problems? How can the shareholders protect their right? How do the institutional investors affect corporate governance? What are shareholder proxy proposals on governance issues? Course Material: Lecture notes; Chapter 2 of textbook; Chapter 7 of reference book 1; Chapter 6 of reference book 2 Case study Shareholder Activists at Friendly Ice CreamPetroChina (Chinese case) Session 4 Board of directors Contents: What is the primary role of directors and board sub-committees? What regulations govern the functions and structure of boards of directors? What is legally required of directors? What defines a good board? What are the problems in modern board? How might they be changed to fix those problems? What effect the directors nomination and compensation? What is your assessment of the manner in which the Morgan Stanley board handled the crisis? Course Material: Lecture notes; Chapter 3 of textbook; Chapter 4 of reference book 1; Chapter 5 of reference book 2 Case studyRedefining the Role of Outside Directors in An Age of Global Competition the Board of Directors at Morgan Stanley Dean Witter Delphi Corporation Session 5 Management: Performance Contents: In what ways can managers harm stockholders? How to evaluate the performance of the management? What are the pros and cons of compensating a CEO with stock options? What is employee stock ownership plans? What is Anglo-Saxon corporate governance? Course Material: Lecture notes; Chapter 4 of textbook; Chapter 2 of reference book 1; Chapter 3 of reference book 2 Case studyExecutive Remuneration at Reckitt Benckiser plc CEO Evaluation at Dayton Hudson Session 6 International Corporate Governance Contents:

How the corporate governance differ in Japanese or Germany and U.K. or U.S.? What are the characteristics of corporate governance in emerging countries such as India and China? In which aspects does OECD offer guidelines to form an universal codes companies should aspire? Course Material: Lecture notes; Chapter 5 of textbook; Chapter 10 of reference book 2 Corporate Governance in the U.S.: Scandals, Reforms, and the Future Aspects of Japanese Governance Reform Session 7 Corporate Takeovers Contents: What are the two broad rationales for takeovers? What are some of the specific rationales? How takeovers can be viewed as a governance mechanism? What takeover defenses can corporate make? Why takeover defenses might be bad for shareholders? Who benefits when firms have takeover defenses? Can takeovers effectively contribute to the corporate governance? Course Material: Lecture notes; Chapter 8 of reference book 1; Chapter 7 of reference book 2; Part 3&4 of reference book 3 M&A legal context: Basic framework for corporate governance Case study Ten questions raised by ParamountTime/Warner: The Delaware Supreme Court Speaks Session 8 Corporate Social Responsibility Contents: Who are stakeholders of corporation? What is the difference between agency theory and stakeholder theory? What are the four levels of corporate social responsibility? What are the criticisms of profit-maximization focus? What are the criticisms of the stakeholder view of the firm? Do you think corporation should have responsibility to society in general? Course Material: Lecture notes; Chapter 11 of reference book 1; Chapter 8 of reference book 2 Corporate social responsibility, corporate governance, and financial performance Corporate citizenship at American Express