Chapter Questions
How would you characterize a corporation with diffused ownership?
What are some of the pros and cons of family ownership?
How do you explain the decline in SOEs?
Describe the costs involved in principal-agent conflicts.
Define the concept of expropriation of minority shareholders.
What do inside directors bring to a board of directors? What do outside directors have to offer?
What are the advantages and disadvantages of having the positions of board chair and CEO to be held by two different individuals (as opposed to combining these two positions)?
Why would firms want to create an interlocking directorate?
Explain how independence, deterrence, and norms allow a board of directors to effectively control a corporation.
Name and describe the two internal governance mechanisms typically employed by boards.
Briefly summarize the three external governance mechanisms.
How does the typical ownership structure found in a Canadian firm differ from one in the US, Europe, or Japan?
Why do most SOEs suffer from weak external and internal governance mechanisms?
What are some of the formal institutions that affect corporate governance?
Explain how three aspects of recent globalization have influenced corporate governance.
Where does managerial human capital fit into a VRIO framework?
How would you explain stewardship theory?
Given the arguments for converging or diverging corporate governance around the world, which do you think is more likely to occur and why?
Devise your own example of how a firm might differentiate itself in terms of corporate governance.