AYB311 Lecture Notes - Lecture 3: Hih Insurance, Cadbury Report, Barings Bank
Document Summary
Interest in corporate governance practices has increased as a direct result of highly publicised cases of corporate misconduct and concerns over the management of corporations. (for example, barings bank in u. k. , worldcom and enron in u. s. , and hih. Corporate governance- some definitions: corporate governance is defined by the organisation for economic co operation and. Development (oecd) as: a structure which specifies the distribution of rights and responsibilities among the different participants in the organisation and which lays down the rules and procedures for decision-making": cadbury report, 1992, para. 2. 5: corporate governance is the system by which companies are directed and controlled". It is a characteristic of public companies that there is a separation between ownership and control. Owners are many and widely dispersed and have little individual influence or power: managers have more access to information than do the shareholders. This is called information asymmetry: as managers are not owners, they do not bear the wealth effects of their actions.
