corporate governance mechanisms

Question 1

what level of ownership mechanism

Answer 1

size of capital: smal or large share holders (1%- 10%)

• presence of institutional investors
• legal cosntrain mechanis: constrain nº of votes , guive prefereti votes

Question 2

large investors Pros?

Answer 2

Have a big power to enforce thei interests in th organization
- have a biguer interest to monitor and control managers action

• control on a smal nº of investor:
• better coordenations

Question 3

Largew investor cons?

Answer 3

• can lead to expropriation of interest of smal invetors
• can lead to Private benefeits ( extra dividens
• can secure to much power that cannot be conteste ( sharehold>50%)

Question 4

Board issues?

Answer 4

size and compostion of menber 
structure of comissioon
- tiel levels 
- independent and non executive directors
leadership: CEO and chaiholder

Question 5

Large vs smal Board

Answer 5

8- 10 menbers

• tradeoff between more information/ competencie vs faster decison making
• Presence of free riding