《管理学专业英语教程(第4版)》教学课件—lesson3 The Case of Contingent Governance
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LOGO
Two broad streams of commentary and research
❖Methods used to deal with problems Auditing Oversight mechanisms Company policies Compensation incentives Succession planning
LOGO
Two broad streams of commentary and research
❖Methods used to deal with problems
The driving governance role
✓ Boards must emphasize a particular subset of activities in decision making and resource allocation. The dominant subset of those activities is called the driving governance role.
LOGO
The reason for contingent governance ❖Evolving conditions
Governance has to continually adapt to changing conditions because a company, its management and business environment are forever evolving. As a result, corporate boards must adopt the right roles to reflect and shape those governance conditions.
LOGO
The reason for contingent governance
❖Imperfect markets
In an ideal world comprising competitive markets and transparent information, the legal system and market processes would, by themselves, provide perfectly adequate corporate governance.
The role must change
✓ It must change with shifts in the importance and nature of the externalities that shape the agendas of shareholders created by dysfunctional managerial power.
LOGO
Two broad streams of commentary and research
❖Agency problems
Regulation is rarely optimal,来自百度文库markets are not efficient, and information can never be fully transparent.
Pay attention: The right role of the board depends on the importance of the externalities, which can vary from country to country and from market to market over the life of the company.
The real world, however, is far from ideal. Thus, governance is necessary to deal with the things that fall outside markets as well as the people who would manipulate decisions in their own interests.
Inside an organization Outside an organization
Pay attention: The right role of the board depends on the importance of the agency problems, the difficulty of getting managers to act in the owner’s interests, which can vary over the life of the company, and the tenure of each CEO.
The Case for Contingent Governance
管理学专业英语教程（第四版）
LOGO
Outlines
1 The reasons for contingent governance 2 Two broad streams of commentary and research 3 Focused versus broad governance
LOGO
Two broad streams of commentary and research
❖Externality ❖Agency problems
LOGO
Two broad streams of commentary and research
❖Externality
Markets alone do not capture the full impact of companies; in particular, they do not price certain inputs and outputs of the business, so-called externalities, such as the effect of an organization’s activities on society at large.
Two broad streams of commentary and research
❖Methods used to deal with problems Auditing Oversight mechanisms Company policies Compensation incentives Succession planning
LOGO
Two broad streams of commentary and research
❖Methods used to deal with problems
The driving governance role
✓ Boards must emphasize a particular subset of activities in decision making and resource allocation. The dominant subset of those activities is called the driving governance role.
LOGO
The reason for contingent governance ❖Evolving conditions
Governance has to continually adapt to changing conditions because a company, its management and business environment are forever evolving. As a result, corporate boards must adopt the right roles to reflect and shape those governance conditions.
LOGO
The reason for contingent governance
❖Imperfect markets
In an ideal world comprising competitive markets and transparent information, the legal system and market processes would, by themselves, provide perfectly adequate corporate governance.
The role must change
✓ It must change with shifts in the importance and nature of the externalities that shape the agendas of shareholders created by dysfunctional managerial power.
LOGO
Two broad streams of commentary and research
❖Agency problems
Regulation is rarely optimal,来自百度文库markets are not efficient, and information can never be fully transparent.
Pay attention: The right role of the board depends on the importance of the externalities, which can vary from country to country and from market to market over the life of the company.
The real world, however, is far from ideal. Thus, governance is necessary to deal with the things that fall outside markets as well as the people who would manipulate decisions in their own interests.
Inside an organization Outside an organization
Pay attention: The right role of the board depends on the importance of the agency problems, the difficulty of getting managers to act in the owner’s interests, which can vary over the life of the company, and the tenure of each CEO.
The Case for Contingent Governance
管理学专业英语教程（第四版）
LOGO
Outlines
1 The reasons for contingent governance 2 Two broad streams of commentary and research 3 Focused versus broad governance
LOGO
Two broad streams of commentary and research
❖Externality ❖Agency problems
LOGO
Two broad streams of commentary and research
❖Externality
Markets alone do not capture the full impact of companies; in particular, they do not price certain inputs and outputs of the business, so-called externalities, such as the effect of an organization’s activities on society at large.