Completed notes of the course prof G N

Pagina 1

STRATEGY & MARKETING 1. Corporate governance A company is a group of people working together for a specific objective, which transform inputs in products and services through human, technological and financial resources. The company is defined by its boundaries: the variety of outputs, the level of integration and the geography of served markets. Corporate governance refers to the set of systems, principles and processes by which a company is governed. It helps to match individuals’ and company’s objectives. Principles of a Corporate Governance: - Rights and equitable treatments of shareholders: transfer shares, be informed, vote in meetings, participate in big decisions, elect and remove board, share profits, have equal rights. - Interest of other stakeholders: create cooperation and sustainable growth with operators like employees, investors, creditors, suppliers, local communities, customers, policy makers. - Role and responsibilities of the board: set goals, watch over big investments, review budgets and business plans, select key executives, manage conflicts of interest, oversee disclosure and communication. - Integrity and ethical behavior: organization should develop an ethical code for choosing and guiding directors. - Disclosure and transparency: about results, goals, ownership, board members, remuneration, risks, information on stakeholders, governance policies. In Netherlands and Germany, it’s used to split supervisory board (shareholders and employees) from executive board. In USA and UK, it’s used a single tired board of directors with executives hired and fired by non-executives, chosen by shareholders. Company’s objectives: short-term value, shareholders’ value, economic value, stakeholders’ value. Short-term value is by definition linked to annual…