MANAGING THE CORPORATION

Question 1

3 pros of workers co-determination

Answer 1

1. less corporation’s contracting costs
2. less asymmetries of info between firm & labour unions
3. more protection of employees rights

Question 2

reasons to choose a certain model (6)

Answer 2

1. costs
2. business combinations (mergers)
3. managing generation transition
4. subsidiary of a foreign company (follows the same model as parent company)
5. make hostile takeovers more difficult (the model can make it difficult for new sh to revoke BoD)
6. inertia or path-dependency

Question 3

roles of the Chairperson

Answer 3

1. calls meetings, sets agenda, conducts discussions & voting procedures
2. ensures procedural fairness & circulation of info among BoD

Question 4

rules concerning the composition of the BoD may be (3)

Answer 4

1. mandatory
2. mandatory only if the company is listed
3. voluntarily adopted by the corporation (for listed companies: comply or explain principle)

Question 5

appointment of directors

Answer 5

1. during sh meeting
2. sh propose candidates
3. it is decided what characteristics of the candidates must be shared with the meeting in order to decide who to elect

Question 6

if Directors act ultra-vires 2 consequences

Answer 6

1. liable towards the corporation
2. contracts they have entered are still binding