Business ethics: week 5 - Shareholders and Ethics

?
  • Created by: jf00632
  • Created on: 17-03-19 09:14
What different type of shareholders are there?
Shareholders as owners of a firm and Shareholders as political actors and corporate governance
1 of 12
Explain shareholders as a firm
• People who buy shares in the corporation • Expect managers to run the corporation in their interest
2 of 12
Explain Shareholders as political actors
• Identify companies that are underperforming their potential • Campaign for unlocking the value (typically via mergers, spin-offs, restructuring) • Buy shares in company for right to speak at the AGM • Socially Responsible Investment
3 of 12
Explain corporate governance
• Change the incentives • Make information less asymmetric • Board of Directors (BoD) • Financial intermediaries
4 of 12
What rights to the shareholders have?
• The right to selltheir stock • The right to vote in the general meeting • The right to certain information about the company • The right to suethe managers for (alleged) misconduct • Certain residual rights in case of the corporation’s liquidation
5 of 12
What duties do the managers have?
• Duty to run the company in the interests of shareholders (note: stakeholder theorists may not agree) • Duty to act for the benefit of the company • Duty of care and skill • Duty of diligence
6 of 12
What problems do the agency have?
• Misaligned interests and asymmetric information cause ethical problems
7 of 12
Ethical Investment (Socially Responsible Investing)
look at notes
8 of 12
what is corporate governance? p232
the rules, processes and structures through which corporatios are directed and controlled in the interests of shareholder and stakeholders
9 of 12
What is executive accountability? p239
the systems and processes through which senior executives can be held responsible for the perforance of the firm by shareholders/stakeholders typically via the board of directors
10 of 12
What is insider trading?
A financial market transaction based on info that is not publicly available to all other market participants
11 of 12
When does insider trading occur? (Moore) p247
it occurs when securities are bought or sold on the basis of material non- public info
12 of 12

Other cards in this set

Card 2

Front

Explain shareholders as a firm

Back

• People who buy shares in the corporation • Expect managers to run the corporation in their interest

Card 3

Front

Explain Shareholders as political actors

Back

Preview of the front of card 3

Card 4

Front

Explain corporate governance

Back

Preview of the front of card 4

Card 5

Front

What rights to the shareholders have?

Back

Preview of the front of card 5
View more cards

Comments

No comments have yet been made

Similar Business Management resources:

See all Business Management resources »See all Ethics resources »