• Identify and analyse corporate governance (agency) problems.
• Assess how corporate governance shapes corporate finance including capital structure, investment decisions and capital costs.
• Analyse how the corporate governance of a particular company is likely to influence its economic performance.

The course develops agency theory as an analytical framework for analyzing corporate governance issues. For example shareholder value maximization can be implemented through contestable ownership and removal of takeover barriers, independent boards, stock option programs and legal protection of minority investors. Corporate governance in turn has implications for financial objectives, for example risk preferences or attention to stakeholders.  The course will cover agency and other governance theories, alternative governance mechanisms, international corporate governance, corporate governance codes, ownership structure, boards and executive compensation.
 

The aim of this course is to gain an in-depth understanding of corporate governance and how corporate governance interacts with corporate finance to influence corporate performance. The course will introduce the students to corporate governance issues and teach them to analyse how different corporate governance mechanisms – like ownership and board structure, legal systems and incentives – contribute to the solution of agency problems and thereby influence corporate economic performance. Using this framework the course will then study the impact of corporate governance on corporate performance depending on company specific factors. The course will enable students to undertake a corporate governance review of an individual company including an assessment of how ownership, board structure, managerial incentives and system characteristics influence company performance. 

Thomsen, Steen and Conyon, Martin (2011). Corporate Governance: Mechanisms and Systems. McGraw Hill. London.