1.1. Dealing with the allocation of powers of the co amongst SS, BOD, MGMT + other SS(like employers)
1.2. Risk gov& mgmgt is an important aspect
1.3. Right people at the top of the organisation setting the one
1.4. Enhancing LT SS value/ success of org
2. Internal CG mechanisms
2.1. BOD, SS, Auditors, IC & risk mgmt system, FR & disclosure, executive compensation system
3. External CG mechanisms
3.1. legal & regulatory framework, pdt & factor mkt competition, managerial labour market, corp control marker, self-regulatory organisation, proxy advisory firms, CG rating firms, SS watchdog groups/CG activist, media, other intermediaries(analysts)
4. Shareholder vs stakeholder model
4.1. Diff: primacy of interests of shareholders vs stakeholders & obligations of BOD to take into acc broader stakeholder grp
4.2. Focus: sustainability, environmental, social and governance (ESG)
4.3. 1. Shareholders vs Management (Type 1 agency problem): principal-agency problem 2. Controlling SS vs Minority SS (Type 2): problems with concentrated ownership 3. LT SS vs ST SS: LT prefers co to remain independent but ST prefer cash out in takeover 4. SS vs Creditors: SS willing to take higher risks for higher returns but creditors prefer no risk given fixed returns 5. SS vs other stakeholders: employee layoffs hurt employees but benefit SS
5.3. Can be Hybrid too like family controlled and professionally managed or no substantial SS & professionally managed ( SGX)
5.4. Pyramid Ownership: Li Ka Shing a business group that consists of a set of enterprises or other entities and displays a top-down chain of control.
5.5. Dispersed ownership: Common in australia & japan
5.6. US: low managerial ownership, high individual and institutional ownership, activist investors increasing
5.7. UK: low managerial, lower individual and higher institutional than US --> Stewardship code
6. Problems with ownership structures
6.1. Diffused: where are the SS
6.2. family/founder ownership: dominance of controlling SS
6.3. high governance ownership: dominance of controlling SS
7. Board structures around the world
7.1. consists of NED (Independent or not), ED ( part of mgmt)
7.2. Board's role: oversight/ monitoring w secondary role of advising/ guiding mgmt
7.3. Dual Board ( Separate supervisory Board and management board): membership of the two boards are totally diff common in Asia BAD: take longer time for decision-making = higher likelihood for conflct