Synopses & Reviews
In the wake of the recent dramatic series of corporate meltdowns: Enron; Tyco; Adelphia; WorldCom; the timely new edition of this successful text provides students and business professionals with a welcome update of the key issues facing managers, boards of directors, investors, and shareholders.
In addition to its authoritative overview of the history, the myth and the reality of corporate governance, this new edition has been updated to include:
- analysis of the latest cases of corporate disaster;
- An overview of corporate governance guidelines and codes of practice in developing and emerging markets
- new cases: Adelphia; Arthur Andersen; Tyco Laboratories; Worldcom; Gerstner's pay packet at IBM
Once again in the new edition of their textbook, Robert A. G. Monks and Nell Minow show clearly the role of corporate governance in making sure the right questions are asked and the necessary checks and balances in place to protect the long-term, sustainable value of the enterprise.
A CD-ROM containing a comprehensive case study of the Enron collapse, complete with senate hearings and video footage, accompanies the text. Further lecturer resources and links are available at www.blackwellpublishing.com/monks
Review
"The most comprehensive examination and commentary on corporate governance that I have yet seen ... If I had to choose one book among the dozens available to explain and illuminate the complexities of corporate governance, this definitive treatise would be it."
Hugh Parker "Corporate Governance is a lucid and comprehensive introduction to a subject that is of critical importance to anyone interested in business. Everyone, from student, to scholar, to corporate employee, officer, director, or shareholder, will find it valuable." Donald Jacobs, Dean, Kellogg School of Business, Northwestern University
"This is what we've needed - a solid text on corporate governance written by two of the real stars in the field." D. Jeanne Patterson, former Associate Professor of Public and Environmental Affairs, Indiana University
"A fresh, thoughtful, and timely look at the problem of corporate governance... a little gem." Joseph A. Grundfest, Stanford Law School
"Exactly what's needed for MBA students and management professionals." Gordon Clark, Dean, Faculty of Arts, Monash University
"The MBA student seeking real world examples will be well satisfied with this material ... a major strength of the book is the practitioner perspective that the authors bring to the area." Stuart L. Gillan, The University of Texas at Austin
"... authoritative and informative, with some fascinating case vignettes ... A monumental work." Bob Tricker, Editor, Corporate Governance
"… carefully blends economic and legal aspects of corporate governance. Highly recommended for use in seminars on board practices, MBA programs, and corporate governance forums." Cornelis A. de Kluyver, former Dean, School of Business Administration, George Mason University
"Highly useful ... illuminates the current issues facing managers, boards of directors, and shareholders, as well as explaining their respective roles in the corporation." Ira M. Millstein, Weil, Gotshal & Manges; Lester Crown Visiting Faculty Fellow, Yale School of Management
"Provides a strong theoretical framework for the subject. It gives meaning to the important public policy issues by numerous examples, case studies, and policy statements." Professor J. Fred Weston, UCLA
(Praise for the first edition.)
"Corporate Governance is truly a remarkable achievement - it combines a global perspective and a finely balanced account of regulatory policy with illuminating case studies of how governance works inside companies. It remains the key point of reference in its field.' Simon Deakin, Judge Institute, University of Cambridge
Synopsis
In a business environment that is increasingly volatile, now more than ever, business students must understand the relationships between managers, boards of directors, shareholders, and investors.
The new edition of this acclaimed text offers an indispensable guide to the key concepts of corporate governance every student and business professional should know. It includes more exercises and student questions, penetrating analysis of the latest examples of corporate failure and controversy, and the lively "cases in point" which have characterized previous editions.
Corporate Governanceprovides an authoritative overview, offering the latest codes of practice, new cases of current interest; and a web link to The Corporate Library, the leading independent research firm in the field. It is an invaluable resource tool for business managers and students alike.
Synopsis
The new edition of this successful text offers an indispensable guide to the key concepts of corporate governance every student and business professional should know. It includes more exercises and student questions, penetrating analysis of the latest examples of corporate failure and controversy, and the lively "cases in point" which have characterized previous editions.
- Features 16 case studies of corporations in crisis, including General Motors, American Express, Time Warner, IBM, and Premier Oil
- Contains an invaluable web link to The Corporate Library, the leading independent research firm dedicated to corporate governance
- Includes an Appendix with an overview of CG Guidelines and Codes of Best Practice in Emerging Markets
Synopsis
In the wake of the dramatic series of corporate meltdowns: Enron; Tyco; Adelphia; WorldCom; the timely new edition of this successful text provides students and business professionals with a welcome update of the key issues facing managers, boards of directors, investors, and shareholders.
In addition to its authoritative overview of the history, the myth and the reality of corporate governance, this new edition has been updated to include:
- analysis of the latest cases of corporate disaster;
- An overview of corporate governance guidelines and codes of practice in developing and emerging markets
- new cases: Adelphia; Arthur Andersen; Tyco Laboratories; Worldcom; Gerstner's pay packet at IBM
Once again in the new edition of their textbook, Robert A. G. Monks and Nell Minow show clearly the role of corporate governance in making sure the right questions are asked and the necessary checks and balances in place to protect the long-term, sustainable value of the enterprise.
A CD-ROM containing a comprehensive case study of the Enron collapse, complete with senate hearings and video footage, accompanies the text. Further lecturer resources and links are available at www.blackwellpublishing.com/monks
About the Author
Robert A.G. Monks and Nell Minow are founders of The Corporate Library, the leading independent research firm dedicated to corporate governance. Formerly, they were principals of the Lens Fund, 'a vehicle for collective action' that used shareholder activism to improve corporate governance -- and shareholder returns in its portfolio companies, and officers of Institutional Shareholder Services, a proxy advisory firm. Monks and Minow have also collaborated on two other books – ‘Power and Accountability’ (1991) and ‘Watching the Watchers’ (Blackwell Publishing, 1996).
Table of Contents
Cases In Point.
Acknowledgements.
Introduction.
1. What Is A Corporation?.
Definitions.
Evolution Of The Corporate Structure.
The Purpose Of A Corporation.
Human Satisfaction.
Social Structure.
Efficiency And Efficacy.
Ubiquity And Flexibility.
Identity.
The Corporation As A “Person”.
The Corporation As A Complex Adaptive System.
The Corporation As A “Moral Person”.
The Corporation In Society.
The Marketplace.
Future Directions.
Corporate Power And Corporate Performance.
Corporate Crime: “Within The Limits Of The Law”.
Probation Of Corporations.
Corporations And Government: Co-Opting The Market.
Measuring Performance.
Balancing Interests.
Good And Bad Corporations?.
Equilibrium: The Cadbury Paradigm.
Measuring Value Enhancement.
Gaap.
Market Value.
Earnings Per Share.
Eva®: Economic Value Added.
Human Capital: “It’s Not What You Own But What You Know”.
Knowledge Capital.
The Value Of Cash.
Corporate “Externalities”.
Non-Economic Considerations In Corporate Management.
2. Shareholders: Ownership.
Definitions.
Early Concepts Of Ownership.
Early Concepts Of The Corporation.
A Dual Heritage: Individual And Corporate “Rights”.
The Re-Invention Of The Corporation: Eastern Europe In The 1990s.
The Evolution Of The American Corporation.
The Essential Elements Of The Corporate Structure.
The Separation Of Ownership And Control, Part 1: Berle And Means.
Fractionated Ownership.
The Separation Of Ownership And Control, Part 2: The Takeover Era.
Waking The Sleeping Giant.
A Framework For Participation.
Ownership And Responsibility.
No Innocent Shareholder.
To Sell Or Not To Sell: The Prisoner’s Dilemma.
Who The Institutional Investors Are.
Bank Trusts.
Mutual Funds.
Insurance Companies.
Universities And Foundations.
Pension Plans.
The Biggest Pool Of Money In The World.
Pension Plans As Investors.
Pension Plans As Owners.
Public Pension Funds.
Economically Targeted Investments.
Federal Employee Retirement System.
Tiaa-Cref.
Private Pension Funds.
The Sleeping Giant Awakens: Shareholder Proxy Proposals On Governance Issues.
Focus On The Board.
Sec’s Proxy Reform.
Synthesis: Hermes.
Investing In Activism.
New Models And New Paradigms.
The “Ideal Owner”.
Pension Funds As “Ideal Owners”.
Is The “Ideal Owner” Enough?.
3. Directors: Monitoring.
A Brief History Of Anglo-American Boards.
Today’s Typical Board.
Size.
Inside/Outside Mix.
Diversity.
Meeting Frequency.
Ownership.
Board Duties: The Legal Framework.
The Board-Management Relationship.
Information Flow.
The Year Of The Corporate Scandal.
The Ceo-Chairman.
Catch 22: The Ex-Ceo As Director.
Ceo Succession.
Director Nomination.
Director Compensation.
Interlocks.
Time And Money.
The Director’s Role In Crisis.
Independent” Outside Directors.
Director Election.
Staggered Boards.
Confidential Voting.
Impact Of The Takeover Era On The Role Of The Board.
The Fiduciary Standard And The Delaware Factor.
How Did Boards Respond?.
Greenmail.
“Poison Pills”.
Other Anti-Takeover Devices.
Recommendations For The Future.
Improving Director Compensation.
Increasing The Authority Of Independent Directors.
“A Market For Independent Directors”.
“Designated Director”.
Splitting The Chairman And Ceo Positions.
“Just Vote No”.
Audit Committees.
Board Evaluation.
Executive Session Meetings.
Succession Planning And Strategic Planning.
Lipton/Lorsch’s “Modest Proposal”.
Making Directors Genuinely “Independent”.
Involvement By The Federal Government.
Involvement By Shareholders.
4. Management: Performance.
Introduction.
What Do We Want From The Ceo?.
The Biggest Challenge.
Executive Compensation.
Stock Options.
Restricted Stock.
Shareholder Concerns: Several Ways To Pay Day.
The “Guaranteed Bonus” – The Ultimate Oxymoron.
Deliberate Obfuscation.
The Christmas Tree.
Compensation Plans That Are Upside And No Downside.
Loans.
Phony Cuts.
Golden Hellos.
Transaction Bonuses.
Retirement Benefits.
Future Directions For Executive Compensation.
Ceo Employment Contracts.
Gross-Ups.
“Deemed” Years Of Service.
Cause.
Change Of Control.
Half Now, Half Later.
Employees: Compensation And Ownership.
Employee Stock Ownership Plans.
Mondragon And Symmetry: Integration Of Employees, Owners, And Directors.
Conclusion.
5. International Governance.
Corporate Governance Has Gone Global.
The Triumph Of The Corporation.
The Global Company.
The Global Investor.
The Demands Of Capital.
The Triumph Of The Code.
Universal Codes.
An Investor Perspective.
Limits To Convergence.
The Asian Financial Crisis, The World Bank And Governance In Emerging Markets.
World Bank And G7 Response.
Global Corporate Governance Forum.
The Developed World.
EU.
Japan.
Corporate Governance Forum Of Japan.
Germany.
German Governance Code.
Earthquake.
Future Perfect?.
France.
French Ownership.
Management And Boards: Non State-Owned Companies.
Vienot I And Ii.
Corporate Governance And Foreign Policy.
A Race To The Bottom?.
Convergence?.
6. Case Studies: Corporations In Crisis.
General Motors.
General Motors And Pierre Du Pont.
General Motors: What Went Wrong?.
General Motors And Ross Perot.
General Motors After Perot: Smith And Stempel.
General Motors: A Postscript.
American Express.
Time Warner.
Sears, Roebuck & Co.
Diversification Strategy: The Fate Of Retail.
Sears: A Postscript.
Armand Hammer And Occidental Petroleum.
Polaroid.
Polaroid’s Esop: Delaware Sits In Judgment.
Carter Hawley Hale.
Hostile Takeover.
After The Restructuring.
Eastman Kodak.
Waste Management Corp.
Gold Into Garbage.
Lens And Soros.
The Soros Effect.
Restructuring.
What Went Wrong?.
How Was It Solved?.
Waste Management: A Postscript.
Stone & Webster.
Stone & Webster: The Company That Built America.
Postscript 2000.
Mirror Group/Trinity Mirror.
Adelphia.
What Happened?.
Arthur Andersen.
Andersen Consulting.
A Conformist Culture.
Who Watches The Watchers?.
Corporate Governance.
Hubris.
Tyco (By Robert A. G. Monks).
Worldcom (By Beth Young).
Growth By Acquisition.
Worldcom’s Board Of Directors.
Worldcom’s Auditor.
Case Study: Gerstner’s Pay Package At Ibm.
The Anatomy Of A Contract.
Appendix: Overview Of Corporate Governance Guidelines And Codes Of Best Practice In Developing And Emerging Markets By Holly J. Gregory.
Overview.
The Corporate Objective.
Board Responsibilities And Job Description.
Board Composition.
Board Committees.
Disclosure Issues.
Summary.
Index