Book 2_Corp_INVESTORS AND OTHER STAKEHOLDERS Flashcards
Debtholders
a legal claim to the promised interest and principal payments.
Equity holders
a residual claim to the company’s net assets after debtholders have been paid
Conflicts of interest between debtholders and equity holders
Debt has limited upside potential
Equity has theoretically unlimited upside potential
Private debtholders
may have access to nonpublic information from company management
The primary stakeholders
shareholders, debtholders, the board of directors, senior management, employees, creditors, suppliers, and government
one-tier board structure
both inside and independent directors serve on a single board
two-tier board structure
the independent directors serve on a supervisory board that oversees a management board comprising inside directors.
staggered board
only a fraction of the board is elected each year
Stakeholder theory
balance the interests of all stakeholders.
Environmental factors
company contributions to climate change, air and water pollution, deforestation, energy efficiency, waste management, and water scarcity
Environmental risk
Physical risk, transition risk, Stranded assets
Social factors
the protection of customer privacy and information security, customer satisfaction, employee engagement, diversity and inclusion, labor relations, and community relations.
Corporate governance factors
the composition of the board, executive compensation, the internal audit function, bribery and corruption, political contributions, and lobbying.
Stranded assets
arise from obsolescence of existing assets that do not conform to new environmental standards
