2012/2013
KAN-AEF_AE40 Firm Theory and Corporate Governance
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English Title
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Firm Theory and Corporate Governance
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Language
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English
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Exam ECTS
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7.5
ECTS
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Type
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Mandatory
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Level
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Full Degree Master
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Duration
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One Semester
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Course period
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Spring
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Time Table
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Please see course schedule at e-Campus
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Study board
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Study Board for MSc in Economics and Business Administration
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Course coordinator
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Aleksandra Gregoric
- Department of International Economics and Management
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Main Category of the Course
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Economics, macro economics and managerial economics
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Last updated on 15-10-2012
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Learning objectives
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Corporate governance deals with how firms are organized and, in particular, with the relationship between owners, managers and other stakeholders in a corporation. The main objective of this course is to equip students with a knowledge base in order for them to be able to understand and participate in the general decision making concerning governance activities in a corporation.
Upon completion of the course the students should be able to:
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Discuss the concepts of incomplete contracts, moral hazard, asymmetry of information etc. and critically analyse the agency issues in private corporations.
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Identify the relevance of corporate laws in mitigating the agency problems in the corporations.
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Identify the benefits and downsides associated with various types of structures, such as corporations with concentrated ownership, family firms, etc. and critically assess the specifics of these governance structures in comparison to firms with dispersed ownership and control.
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Identify the opportunities and potential pitfalls in the use of incentive based remuneration as a tool to motivate managers and to critically assess the efficiency of various incentive schemes.
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Critically assess the structure of corporate boards and discuss its implications for board behaviour and firm performance.
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Identify and elaborate on the main barriers to efficient functioning of the board of directors and other corporate governance mechanisms (i.e. incentives, large owners, legal rules etc.).
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Critically discuss the influence/role of other stakeholders (i.e. Government, employees) in firm governance and its implications for the decision –making in private corporations.
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Compare and evaluate the specifics of the corporate governance systems across the world, to critically assess selected elements of governance codes, and to be able to apply these recommendations and the acquired knowledge of corporate governance to real world cases.
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Examination
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Firm Theory and Corporate Governance
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Firm Theory and Corporate Governance:
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Type of test
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Written Exam
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Marking scale
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7-step scale
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Second examiner
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No second examiner
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Exam period
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April and May/June, The retake will take place in June.
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Aids
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Closed Book
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Duration
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4 Hours
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The exam has the form of three compulsory case preparations during the course on a pass/fail basis and an individual 4-hour written closed book exam with a case analysis starting two days before the exam date. All three case preparations must be passed prior to the registration for the 4-hour written exam. The regular exam takes place in April.
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Prerequisites for attending the exam
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3 compulsory case preparations during the course on a pass/fail basis.
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Course content
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An applied case-based economics course. It complements the courses Corporate Finance and Industrial Organization.
The course is a topic course, covering various issues in corporate governance. We begin with a general introduction to corporate governance. After this introduction we proceed to discuss the legal approach to corporate governance, focusing on investor protection through regulation and corporate laws. We continue by analyzing firm ownership structure (concentrated ownership, control enhancing mechanisms, etc.) and the specifics of the governance of closely held corporations and family controlled firms. We next investigate the firms’ internal control mechanisms (incentives, boards of directors). Finally, we take a closer look at the governance of start-up and innovative companies, and at the role of stakeholders in firm governance.
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Teaching methods
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The format of the course is based on three elements:
1. Case analysis (i.e. in groups you will solve and present four business cases).
2. Lectures and discussion on the newest relevant research in corporate governance.
3. Guest lectures by representatives of business community.
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Expected literature
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Preliminary literature.
Collection of cases and articles on corporate governance.
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Last updated on 15-10-2012
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