Course Catalogue

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This course provides an introduction to Corporate Governance from an economic perspective. Corporate Governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment. The so-called shareholder view of corporate governance considers only shareholders entitled with a residual claim to the profits of a company as the relevant stakeholders. The course uses this as a working hypothesis but also discusses the broader stakeholder view that includes employees, suppliers, creditors and society as a whole as stakeholders in a firm. The need for corporate governance stems from conflicts of interests between shareholders and managers (agency conflict of type I) or between large and small shareholders (agency conflict of type II). To mitigate such agency costs, a variety of mechanisms can be used: monitoring by a board of directors, reputation by managers and large shareholders, incentive contracts for top managers, the threat of takeover, and government regulation to protect investors, among others. The course studies each of these mechanisms in detail, using economic models and mathematical algorithms, data analysis, case studies and a survey of empirical research on each topic.

One two-hour lecture per week (for 10 weeks) on campus.

Four two-hour tutorials on campus.

Asynchronous learning activities will include revision questions, online quizzes, videos, and directed reading for approximately 10 hours.

Students must be registered on one of the associated programmes listed in this course specification.

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The course aims to:

1. provide students with a sound knowledge of concepts, main theoretical models (in their mathematical formulation), and empirical research of corporate governance.

2. make students understand in whose interest corporations are governed and what the roles of owners, other stakeholders, the board of directors, and the CEO are.

3. develop students' ability to apply the concepts to real-world cases, to search, analyse, and interpret relevant data, e.g., on board composition, CEO compensation, and the ownership structure of corporations.

By the end of this course students will be able to:

1. Discuss the theory and the practical aspects and apply economic theory of corporate governance,

2. Find, organise, and present quantitative and qualitative data on important aspects of corporate governance,

3. Apply mathematical models and algorithms to understand incentive problems, complex ownership structures and voting procedures in corporations,

4. Analyse economic arguments related to the societal impact of corporate governance,

5. Communicate effectively and clearly in written and oral formats,

6. Develop teamworking skills through collaboration with peers while producing a combined piece of coursework.

Students must submit at least 75% by weight of the components (including examinations) of the course's summative assessment.