Week 4 Flashcards
US courts may decide to “lift the corporate veil” because
- A parent corporation hides illicit activity in a subsidiary
- The corporation was formed with insufficient capital
Internal stakeholders
External stakeholders
Window dressing definition
Window dressing is a strategy used by mutual fund and other portfolio managers near the year or quarter end to improve the appearance of a fund’s performance before presenting it to clients or shareholders. To window dress, the fund manager sells stocks with large losses and purchases high-flying stocks near the end of the quarter. These securities are then reported as part of the fund’s holdings.
Agency theory
Definition of corporate governance
– System of rules, practices and processes by which a company is directed and controlled
– Aims at balancing the interests of the stakeholders
Objectives of corporate governanace
- ensure integrity in the company’s operations
- hold the management accountable for its actions
- encourage investor and public confidence
- promote sustainable long term management and economic stability
B.Principles of corporate governance
Statutory model (Management structure of corporations)
Publicly held corporation (Management structure of corporations)
Closely held corporation (Management structure of corporations)
Shareholders = Directors = Officers
Corporate governance in a listed company
Corporate governance in a non-listed company
The notion of CSR encompasses all the obligations of the company as regards social, environmental and economic matters
CSR Implementation
- France: Mandatory reporting on the financial risks related to climate change
- International: ISO 26000 international norm about social responsibility
