Comparative Corporate Governance

This subject has the following teaching availabilities in 2008:

Objectives:

A candidate who has successfully completed the subject should:

• Understand the meaning of the agency problem in the context of the modern corporation
• Understand the tension between authority and responsibility in corporate legal regulation
• Understand the types of regulatory strategy that can be deployed to address the identified agency problems
• Understand the different approaches of different jurisdictions to effecting these regulatory strategies (jurisdictions include Australian, US, UK and certain continental European jurisdictions)
• Understand governance regimes as systems that deploy different combinations of regulatory strategies that complement and fit with each other
• Understand the scope or lack thereof for regulatory transplantation
• Understand the debate about the scope for and likely outcome of corporate legal convergence process.

Syllabus:

• Introduction to the economic tensions of the corporate form: Authority versus responsibility; the economic agency cost problem; managerial agency costs; controlling shareholder agency costs. Introduction to the regulatory strategies available to address these economic tensions
• Shareholder primacy versus director primary/the balance of power in the corporation: Appointment and removal rights; initiation rights and decisions rights (UK, US, Australia and Germany)
• Directors Duties I: The duty of care; business judgment rule; duty of care liability waivers (US, UK and Australia)
• Directors Duties II: The duty of loyalty and self-dealing; conflicted transactions; corporate opportunities (US, UK and Australia)
• Directors Duties III: The duty to promote the success of the company and stakeholder interests; enlightened shareholder value versus pluralism; the costs of decision making and stakeholder interests (US, UK and Australia)
• Board structure and composition: Unitary versus two-tier boards; composition themes; committee structures; composition and corporate performance (UK, US and Australia)
• Corporate governance and gatekeeper regulation: The role of the auditor as independent gatekeeper; the impact of Enron and US corporate and audit failures; auditor independence regulation (UK, US and Australia)
• Executive compensation: Agency cost solution or cost problem; regulatory approaches to executive compensation (US, UK and Australia)
• The market for corporate control: The market for corporate control as agency cost control; the pros and cons of takeover defences; the US and UK models of takeover defence regulation
• Corporate ownership structures and convergence: Blockholding versus widely held companies; the controlling shareholder agency problem; efficient versus inefficient blockholding; the scope for and likelihood of convergence.

• Take-home examination (100%) (4-7 April)

This subject is not available as a breadth subject.

Objectives:

A candidate who has successfully completed the subject should:

• Understand the meaning of the agency problem in the context of the modern corporation
• Understand the tension between authority and responsibility in corporate legal regulation
• Understand the types of regulatory strategy that can be deployed to address the identified agency problems
• Understand the different approaches of different jurisdictions to effecting these regulatory strategies (jurisdictions include Australian, US, UK and certain continental European jurisdictions)
• Understand governance regimes as systems that deploy different combinations of regulatory strategies that complement and fit with each other
• Understand the scope or lack thereof for regulatory transplantation
• Understand the debate about the scope for and likely outcome of corporate legal convergence process.

Syllabus:

• Introduction to the economic tensions of the corporate form: Authority versus responsibility; the economic agency cost problem; managerial agency costs; controlling shareholder agency costs. Introduction to the regulatory strategies available to address these economic tensions
• Shareholder primacy versus director primary/the balance of power in the corporation: Appointment and removal rights; initiation rights and decisions rights (UK, US, Australia and Germany)
• Directors Duties I: The duty of care; business judgment rule; duty of care liability waivers (US, UK and Australia)
• Directors Duties II: The duty of loyalty and self-dealing; conflicted transactions; corporate opportunities (US, UK and Australia)
• Directors Duties III: The duty to promote the success of the company and stakeholder interests; enlightened shareholder value versus pluralism; the costs of decision making and stakeholder interests (US, UK and Australia)
• Board structure and composition: Unitary versus two-tier boards; composition themes; committee structures; composition and corporate performance (UK, US and Australia)
• Corporate governance and gatekeeper regulation: The role of the auditor as independent gatekeeper; the impact of Enron and US corporate and audit failures; auditor independence regulation (UK, US and Australia)
• Executive compensation: Agency cost solution or cost problem; regulatory approaches to executive compensation (US, UK and Australia)
• The market for corporate control: The market for corporate control as agency cost control; the pros and cons of takeover defences; the US and UK models of takeover defence regulation
• Corporate ownership structures and convergence: Blockholding versus widely held companies; the controlling shareholder agency problem; efficient versus inefficient blockholding; the scope for and likelihood of convergence.

• Take-home examination (100%) (4-7 April)