Contents: Legitimacy and Corporate Governance, Problems in Corporate Governance, Improving Corporate Governance, The Role of Shareholders, The Role of the SEC, Shareholder Activism Investor Relations, An Alternative Model of Corporate Governance. | © 2015 Cengage Learning Chapter 4 Corporate Governance: Foundational Issues © 2015 Cengage Learning Learning Outcomes Link the issue of legitimacy to corporate governance. Identify the best practices boards of directors can follow. Discuss the problems that have led to the recent spate of corporate scandals and the efforts that are currently underway to keep them from happening again. Discuss the principle ways in which shareholder activism exerted pressure on corporate management groups to improve governance. Discuss the ways in which managers relate to shareholders and the issues arising from that relationship. Compare and contrast the shareholder-primacy and director-primacy models of corporate governance. What are their respective strengths and weaknesses? Which do you prefer and why? © 2015 Cengage Learning Chapter Outline Legitimacy and Corporate Governance Problems in Corporate Governance Improving Corporate Governance The Role of Shareholders The Role of the SEC . | © 2015 Cengage Learning Chapter 4 Corporate Governance: Foundational Issues © 2015 Cengage Learning Learning Outcomes Link the issue of legitimacy to corporate governance. Identify the best practices boards of directors can follow. Discuss the problems that have led to the recent spate of corporate scandals and the efforts that are currently underway to keep them from happening again. Discuss the principle ways in which shareholder activism exerted pressure on corporate management groups to improve governance. Discuss the ways in which managers relate to shareholders and the issues arising from that relationship. Compare and contrast the shareholder-primacy and director-primacy models of corporate governance. What are their respective strengths and weaknesses? Which do you prefer and why? © 2015 Cengage Learning Chapter Outline Legitimacy and Corporate Governance Problems in Corporate Governance Improving Corporate Governance The Role of Shareholders The Role of the SEC Shareholder Activism Investor Relations An Alternative Model of Corporate Governance Summary © 2015 Cengage Learning Legitimacy and Corporate Governance Legitimacy - A condition that prevails when there is a congruence between an organization’s activities and society’s expectations. Legitimation - A dynamic process by which a business seeks to perpetuate its acceptance. © 2015 Cengage Learning Legitimacy © 2015 Cengage Learning Corporate Governance - Refers to the method by which a firm is being governed, directed, administered, or controlled, and to the goals for which it is being governed. Is concerned with the relative roles, rights, and accountability of such stakeholder groups as owners, boards of directors, managers, employees, and other stakeholders. © 2015 Cengage Learning Roles of Four Major Groups - Shareholders - Own stock in the firm, giving them ultimate control (the shareholder-primacy model). Board of Directors - Govern and oversee management of the .
