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Details Title: Strategic Mgt. Description: Test 1. Corporate Governace Total Flash Cards: 13 Created: 02/19/2007 12:09:39	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term What is Corporate Governance? Definition relationship among stakeholders used to determine and control the strategic dircetion and performance of organziations Term What is the primary objective of Corporate Governance? Definition to establish order between a firm's owners and its top-level managers whose interests may be in conflict Term Basis of the Modern Corporation Definition shareholders purchase stock.......reduce risk by holding diversified portfolios....professional managers are contracted to provide decision making. Term Who are the three groups that make up Corporate Governance Definition Shareholder, Management, Board of Directors Term Who are the agents and who are the principles? Definition Agents are top Management....and Principles are shareholders Term Agency Relationship Problems...what are they and explain Definition Use of free cash flows.......managers prefer to invest funds into new products while shareholders would rather receive the funds as dividends so that they can receive a better return elsewhere. Term What are some responses to Agency problems Definition Stockholders rely upon internal and external goverance mechanisms to prevent managerial opportunism Term Governance Mechnanisms...what are they? Definition Ownership concentration, Board of Directors...Executive Compensation...and Market for Corporate Control Term Ownership Concentration...internal or external governance mechanism? Definition external Term Board of Directors...internal or external governance mechanism? Definition Internal Term Executive Compensation...internal or external governance mechanism? Definition Internal Term Market for Corporate Control...internal or external governance mechanism? Definition external... hostile takeoever is an example Term It is important to sesrve the intersts of the firms multiple stakeholder groups...what are the groups? Definition capital, product, and organizational stakeholders.