Corporate Finance: Corporate Governance Flashcards
1
Q
Corporate Governance Definition
A
Policies, principles, and procedures that are clearly defined in order for stakeholders (equity and management) to resolve conflicts.
2
Q
Objectives of Corporate Governance
A
- Eliminate conflicts of interest between stakeholders
- Ensure that assets are used in best interest of investors and stakeholders
2: 15
3
Q
Principle Agent Problem
A
Managers (agents) may pursue interests that differ from the stake holders. 14:30
4
Q
Good Corporate Governance Describes the Rights and/or Responsibilities of Stakeholders?
A
- Rights only, not responsibilities.