SMG SM 131 Study Guide - Comprehensive Final Exam Guide - Time, Capacity Utilization, Starbucks

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Corporate governance: checks and balance of all the different hierarchy. Components: owners/shareholders, board of directors inside and outside directors with focus on outside directors, ceo, managers, employees. Roles of 4 major groups: shareholders, board of directors responsible for shareholders, ceo so much more compensated (261 times more than median employee, retirement perks. Legitimacy of corporate governance: purpose of corporate governance, components of corporate governance, roles of four major groups, separation of ownership from control. Problems in corporate governance: the need for board independence. Issues surrounding compensation: excessive ceo pay, high salary (261 times more than the average employee, executive retirement plans and exit packages. Large retirement bonuses: company perks, outside director compensation, transparency, golden parachutes. Insider trading: trading shares using information that is non-public, tipper vs tipee. The role of shareholders: shareholder democracy, vote/share. The role of the sec: security and exchange commission, regulate financial markets, regulate audits. Shareholder activism: history of shareholder activism, shareholder resolutions, shareholder lawsuits.

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