Corporate Governance

Watch

• Corporate Governance : Meaning, Principles of Corporate Governance, Strategic Management, aktu mba ↗DWIVEDI GUIDANCE
• Corporate Governance Explained | Unpacked | J.P. Morgan Insights ↗jpmorgan
• Corporate Governance Explained in Under 7 Minutes (CFA Level 1) ↗FinTree
• Corporate Governance – WHAT is it and WHY is it important for companies LARGE and SMALL? ↗Matthews Folbigg
• The basics of Corporate Governance ↗Practice Tests Academy
• The Basics of Corporate Governance ↗KnowledgeCity

Read

• The Modern Corporation and Private Property ↗This seminal work dissects the historical separation of ownership from control, laying the intellectual groundwork for understanding agency problems in modern corporations.Adolf A. Berle Jr. and Gardiner C. Means
• Theory of the Firm: Managerial Behavior, Agency Costs and Ownership StructureThe definitive exposition of agency theory, this paper provides the analytical framework for understanding conflicts of interest between managers and shareholders.Michael C. Jensen and William H. Meckling
• The New Rules of Corporate Governance: A Definitive Guide to Best Practice for Boards, Executives, and Investors ↗A practical and comprehensive guide, offering insights into the evolving landscape of corporate governance and best practices for effective oversight.Robert A.G. Monks and Nell Minow
• The Social Responsibility of Business Is to Increase Its ProfitsThis influential essay articulates the foundational argument for shareholder primacy, asserting that a corporation's primary duty is to maximise profits for its owners.Milton Friedman
• The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public ↗A provocative challenge to the prevailing doctrine of shareholder primacy, arguing for a broader view of corporate purpose and stakeholder interests.Lynn Stout

Voices to follow

• Lucian Bebchuk ↗His research at Harvard consistently challenges corporate power structures, advocating for greater shareholder influence and accountability in executive remuneration.Professor of Law, Economics, and Finance, Harvard Law School
• Nell Minow ↗A veteran advocate for investor rights, she offers sharp, often critical, insights into board effectiveness and corporate stewardship.Vice Chair, ValueEdge Advisors
• Anat Admati ↗Her work rigorously dissects the interplay between corporate governance, financial regulation, and systemic risk, particularly within the banking sector.Professor of Finance and Economics, Stanford Graduate School of Business
• Alex Edmans ↗He provides compelling evidence for the long-term benefits of stakeholder-centric governance, moving beyond narrow shareholder primacy.Professor of Finance, London Business School
• Robert Eccles ↗A leading proponent of integrated reporting and ESG integration, he champions a more holistic and sustainable approach to corporate value creation.Visiting Professor of Management Practice, Saïd Business School, University of Oxford

Glossary

• AccountabilityAccountability means being responsible for your actions and decisions, and being able to explain them to others. In a company, it means that leaders and employees are held responsible for their performance and how they use company resources. For example, if a project fails, the manager in charge is accountable for explaining what went wrong and what steps will be taken next.
• Annual General Meeting (AGM)An Annual General Meeting (AGM) is a yearly meeting where a company's Board of Directors reports to its shareholders. Shareholders get to ask questions, vote on important matters, and elect new directors. For example, at an AGM, shareholders might vote on whether to approve the company's financial results for the past year.
• Board of DirectorsThe Board of Directors is a group of people elected by the shareholders to oversee the company's management and make big decisions. They ensure the company is run well and in the best interest of its owners. For example, the Board of Directors might decide if the company should launch a new product line or expand into a new country.
• CEO (Chief Executive Officer)The CEO is the highest-ranking executive in a company, responsible for its overall management and operations. They carry out the strategies set by the Board of Directors and lead the daily running of the business. For example, the CEO of a social media company would be the main person making sure the app works well and planning its future features.
• Company (or Corporation)A company is a business organization that is legally separate from its owners. It can own property, enter into contracts, and be sued, just like a person. For example, a big mobile phone brand like Samsung or Apple is a company that makes and sells products worldwide.
• ComplianceCompliance means following all the rules, laws, regulations, and internal policies that apply to a company. It ensures the company operates legally and avoids penalties or harm to its reputation. For example, a food company must ensure its products meet all government health and safety regulations; this is part of its compliance.
• Conflict of InterestA conflict of interest happens when a person's personal interests or relationships could unfairly influence their decisions or actions for the company. It can make it hard to act purely in the company's best interest. For example, if a manager hires their cousin for a job over more qualified candidates, that could be a conflict of interest.
• Ethics (or Ethical Conduct)Ethics refers to the moral principles and values that guide a company's behavior and decision-making, ensuring it acts in a fair and honest way. Ethical conduct means doing the right thing, even when no one is watching, and considering the impact on everyone involved. For example, an ethical company would refuse to use child labor, even if it could save money, because it's morally wrong.
• ShareholderA shareholder is a person or group who owns a part of a company, usually by buying "shares" (small units of ownership). They are like part-owners and have a say in important company decisions. For example, if you buy a share of a company, you become a shareholder and own a tiny piece of that company.
• StakeholderA stakeholder is anyone who has an interest in or is affected by a company's actions, beyond just the owners. This includes employees, customers, suppliers, the local community, and even the government. For example, when a factory decides to close down, its employees, the local shops they frequent, and the community around it are all stakeholders who will be affected.
• TransparencyTransparency means being open and honest about a company's actions, decisions, and financial information. It helps build trust with shareholders and the public by making information easily accessible and understandable. For example, a company shows transparency when it openly publishes its financial reports and explains how it makes its money.

Threads 8

Where this connects to other fields, and why it's worth knowing.

• The Cell & Molecular Biology Science

  Your cells are wired to commit suicide the moment the body signals they've gone bad. That built-in self-destruct is a control system, the same way a company fires a manager who goes rogue. Cancer is what happens when a cell rips out that off-switch and refuses to die.

• Israel-Palestine Conflict Political Science

  Big countries often fight through proxies, small local groups they arm and fund, for the same reason companies outsource work: it's cheap and you can deny it's really you. But there's a catch bosses know well: the hired hand has its own goals, and can drag its sponsor into exactly the war the sponsor was trying to avoid.

• Oceans & Marine Systems Environment

  When fish are up for grabs, everyone races to grab them first and the ocean empties. Give each fisher a guaranteed 'share' of the catch and suddenly they want the fish stock healthy next year, because it's basically theirs. It's the same fix that stops a company's own managers from stripping it for parts: give people a stake in the future.

• Political Philosophy Philosophy

  A big company is basically a tiny country. It has voters (shareholders), a government (the board), and constant arguments about who has the right to rule. It's replaying a centuries-old philosophy question, when is power legitimate?, just shrunk down to the size of a corporation instead of a nation.

• Climate Change Science

  The planet's temperature is now being decided in company boardrooms. Directors have legal duties to protect the business, and they know oil-heavy assets could become worthless as the world shifts. So a giant science-and-climate question turns into a question about how companies are run.

• AI Governance Global Risks

  Getting an AI to actually do what humans want is an old business puzzle in new clothes. Bosses have always struggled to control workers whose goals differ and whose actions they can't fully watch. Now swap 'worker' for 'AI': how do you steer something you can't monitor and that might not share your aims?

• Voting Systems & Social Choice Mathematics

  Voting has weird quirks where the order of votes can flip the result. Company boards and shareholders vote too, so they inherit those same quirks. That means who controls a company can depend on procedure tricks, not just who owns the most shares.

• Corruption and Governance Political Science

  Citizens own their government but can't watch every official, so some officials cheat. Shareholders own a company but can't watch every executive, so some executives loot it. Corruption and corporate greed are the same gap between owners and the people running things.