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Corporate Governance and Finance

Module description

Summary:
The module bridges the gap between corporate finance and corporate governance. It introduces the concept of corporate governance, discusses its theoretical underpinnings, and details the role of various internal and external governance mechanisms in addressing agency problems arising in modern corporations. The module also highlights the differences between governance systems across the world. The course material is based on seminal readings as well as more recent academic research in the area and it demonstrates the relevance of corporate governance issues to both business and policy makers. The teaching is organised in the form of lectures and smaller-group seminars.

Additional Information:
Internationalisation
Cross-country differences between governance systems around the world are one of the key issues the module focuses on. In particular, the syllabus highlights the variation in relevance and prevalence of various corporate governance mechanisms in different legal systems.

Sustainability
All of the resources for this module (except for the core textbook) are in electronic form only. The syllabus covers some aspects of corporate social responsibility (CSR) and its relevance for corporate governance while discussing emerging topics in corporate governance.

Employability
Students learn to apply insights from the recent academic literature in the context of real-life governance problems. They also develop their skills in team-working, presentation, and independent thinking in this module.

Module aims - intentions of the module

The aim of the module is to familiarise the students with the notion of corporate governance, its theoretical underpinnings, and the role of various corporate governance mechanisms. The knowledge of the relevant academic research and the understanding of major cross-country differences regarding corporate governance regulation and practice across the world should then allow students to propose effective solutions to governance challenges arising in corporations and in the regulatory setting.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. comprehensively understand the notion of corporate governance, its theoretical underpinnings, and the role of various corporate governance mechanisms
• 2. comprehensively understand major cross-country differences regarding corporate governance regulation and practice
• 3. evaluate critically and comparatively the usefulness of various corporate governance mechanisms in addressing agency problems in different institutional settings
• 4. critically appraise how the insights of corporate governance research have informed the policy debate and shaped the corresponding institutional framework in different country settings
• 5. effectively demonstrate familiarity with the recent developments in corporate governance research and practice

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 6. access, synthesise, and evaluate with minimum guidance a body of relevant existing research, critically appraise it, and use it as a guidance in addressing real life corporate finance and governance challenges
• 7. propose novel solutions in financial and governance problem solving and make decisions in unpredictable situations

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 8. apply their own criteria of judgement
• 9. successfully complete a task within a defined period
• 10. present effectively results of a project
• 11. analyse critically problems arising in both academic and practical contexts

Syllabus plan

Introduction: Theories and mechanisms of corporate governance

Board of directors

Executive turnover

Executive compensation and incentives

Market for corporate control

Ownership structure (executive ownership, institutional shareholders and activist investors, conflicts between small and large shareholders)

Payout policy and corporate governance

International corporate governance

Corporate governance rankings

Emerging issues in corporate governance (e.g. corporate social responsibility, gender diversity)

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Indicative learning resources - Basic reading

Basic reading:

• Selection of academic papers available from University of Exeter library collection (Electronic Resources) and electronic Exeter Learning Environment (ELE) portal of the course
• Selection of extracts from the following textbooks (as detailed at ELE):
• M. Goergen (2018). Corporate Governance: A Global Perspective. Cengage Learning
• D. Larcker and B. Tayan (2021). Corporate governance matters: A closer look at organizational choices and their consequences: Third Edition. FT Press, Pearson Education
• S. Thomsen and M. Conyon (2012). Corporate Governance: Mechanisms and Systems. McGraw-Hill Education
• Additional materials available from ELE portal of the course.

Indicative learning resources - Web based and electronic resources

Supplementary learning materials available from ELE portal of the course.

Key words search

Corporate finance; corporate governance; agency problems; law and finance