International Law, Economics and Management > Courses > Corporate Governance
Corporate Governance
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Period |
Academic Year 2010 |
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Points |
7,5 ECTS |
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Semester: |
Fall 2010 (2nd quarter, First Year) |
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Titel of the course |
Corporate Governance |
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Teacher: |
Prof, ph.d. Peter Normann Sørensen (Econ) and Prof, Dr.Jur. Jan Schans Christensen (Law). |
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Teaching time |
Fall |
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Teaching |
The teaching will be based on textbooks, articles, case law and legislation and will include workshops on concrete complex issues with student presentations. The pedagogic approach will be a combination of lectures including guest lectures, small group workshops, presentation of papers and discussion based on a high degree of home studies.
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Purpose |
The purpose of the course is to introduce the standard view on corporate governance and survey research with special emphasis on how governance systems vary among countries around the world.
The course also aims at making the student familiar with more recent discussions about a broader view on corporate governance replacing governance systems based on shareholder values with alternative mechanisms for ensuring corporate performance. In particular, mechanisms, where the financing of specialized human capital is an important aspect of performance, will be considered. Finally, the course provides general insights into organizational economics, which, on the one hand, relies on familiar concepts in microeconomics and, on the other hand, brings the student in a position to address different issues on corporate governance consistently. |
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Content |
According to the standard view, corporate governance deals with the ways in which investors (suppliers of finance, shareholders and creditors) obtain a return on their money. The students will become familiar with the agency approach to corporate governance and to different governance systems, including markets for corporate governance (mergers, acquisitions, management-buy-outs) as well as to an international overview of actual systems, including corporate governance in emerging market economies. More recently, the effectiveness of the board of directors and the market for corporate control as determinant of the value of the firm have been questioned. The course will make the student acquainted with literature pointing out that the importance of financing physical assets as a source of value is weakening, while human capital is becoming more important. Power over human capital has to be obtained through other mechanisms than ownership. The course will give the students knowledge about mechanisms in corporate governance for the provision of incentives to human capital such as stock options, rights of control to employees (“empowerment”) and rights of control to entrepreneurs in venture capital financing for new projects. To give the students the opportunity to fully grasp the various views on corporate governance, the course also provides basic knowledge in the field of organizational economics: organization and efficiency, incentive contracts and property rights. Finally, the course will include a discussion of the economic approach to regulation of corporations at the European Union level
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Course Objectives |
The course intends to provide: Intellectual competences: The course will train the students in identifying relevant issues, as well as critical reflection with respect to the various topics covered by the course. Practical competences: The skills obtained by the students during the course will be relevant for individuals seeking employment with, among others, large companies operating internationally, industrial federations or organizations, governmental agencies, and international organizations dealing with economic issues. The course aims at enabling the students to identify, understand, analyze and critically reflect on the principles, incentives and motivation of the governance of corporations within an international framework. |
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Examination |
Take home essay. Exam time: 72 hours |
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Periode of examination |
End of 2nd quarter |
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Notice: |
The course is part of the Corporate and Business section of the first year and presents an economic approach to corporate governance. To ensure a proper connection to the overall legal framework, a professor from the legal department has participated in organising the course.
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Teaching Material |
Aghion, P, Tirole J (1997), Formal and Real Authority in Organizations, Journal of Political Economy (29 p) Aglietta, M, Rebérioux, A (2005), Corporate Governance Adrift. A critique of shareholder value, Cheltenham, ch 2 (27 p) Barca, F, Becht, M (ed) (2002), The Control of Corporate Europe, chap.1 (Introduction by Becht and Mayer) (45 p) Becht, M, Bolton, P, Roëll, A (2007), Corporate Law and Governance, chs 1-4, 6, 8-9 (34 p) Bottazzi, L, Da Rin, M, Hellmann, T (2004), Active financial intermediation: Evidence on the role of organizational specialization and human capital, CEPR Discussion Paper No. 4794 (39 p) Demski, J (2003), Corporate conflicts of interest, Journal of Economic Perspectives, vol. 17, no 2 (21 p) Fama, E (1980), Agency Problems and the Theory of the Firm, Journal of Political Economy (19 p) Gugler, K (ed) (2001), Corporate Governance and Economic Performance, Oxford, chap. 1-3 (31 p) Hart O, Moore J (1990), Property Rights and the Nature of the Firm, Journal of Political Economy (40 p) Healy, P M, Palepu, K G (2003), The fall of Enron, Journal of Economic Perspectives, vol. 17 no 2 (24 p) Hermalin, B (2004), Lectures on Corporate Governance, chs 1-2 (23 p) Hermalin, B, Weisbach, M (2003), Boards of Directors as an Endogenously Determined Institution: A Survey of the Economic Literature, FRBNY Economic Policy Review (20 p) Jensen, M, Meckling, W (1976), Theory of the firm: Managerial behavior, agency costs and ownership structure, Journal of Financial Economics (56 p) Jensen, M, Ruback, R (1983), The market for corporate control. The scientific evidence, Journal of Financial Economics (42 p) Klein, B (2000), Fisher-General Motors and the Nature of the Firm, Journal of Law and Economics (38 p) Krugman, P, Wells, R, Graddy, K (2008), Economics: European edition, New York, introduction and ch. 1 (19 p) La Porta, R, Lopez-de Silanes, F, Schleifer, A, Vishny, R (2000), Investor protection and corporate governance, Journal of Financial Economics 58 (24 p) Lazonick, W, O'Sullivan, M (2000), Maximizing shareholder value: a new ideology for corporate governance, Economy and Society, vol. 29, no. 1 (22 p) Milgrom, P, Roberts, J (1992), Economics, Organization & Management, London, chs. 2 and 6 (67 p) Monks, R, Minow, N (2004), Corporate Governance, chap. 6 (cases) Rajan, R, Zingales, L (2003), The great reversals: the politics of financial development in the twentieth century, Journal of Financial Economics 69, 5-50, (excluding 4.6 - 4.8 and A1 - A4) (30 p) Rajan, R G, Zingales, L (2000), The governance of the new enterprise (in Vives, X (ed) , Corporate governance. Theoretical and empirical perspectives), Cambridge Solomon, J, Solomon, A, "Enron: a case study in corporate governance failure" (in Salomon, J, Solomon, A, "Corporate governance and accountability"), Chichester 2004 Schleifer, A, Vishny, R (1997), A survey of corporate governance, The Journal of Finance (38 p) Tirole, J (2001), Corporate Governance, Econometrica, vol. 69, no. 1 (35 p) |
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Last edited: |
07/15/2010 |