Disciplines

Corporate Governance


Discipline: EAD5951-3

Concentration area: 12139

Number of Credits: 8

Course load:

Theoretical
(Per week)
Practice
(Per week)
Studies
(Per week)
DurationTotal
42215120
Goals:
The discipline introduces the concept of Governance and its implications for the contemporary business environment. The students will be exposed to the main theoretical approach of Governance, its principles and mechanisms in diferent types of organizations: public held corporations, family controlled, state controlled organizations and not for profit organizations.

Specifically the objectives are the discussion of issues:

• The nature and purpose of organizations
• The main background theories of governance: agency, stewardship and stakeholder approachs.
• The drivers of Corporate Governance: evolution, concepts and main questions addressed.
• The internal and external mechanisms of Governance in diferente types of organizations
• The different models of Corporate Governance around the world
• The relationship among Corporate Governance and Sustainability concepts.
• The challenges of Governance in Family Controlled firms.
• The new frontiers of Governance research: Decision making process – behavioral issues

Justification:
We are in a world of instant communication; where financial markets are integrated; where the investors activism and their concerns about quarterly results is overemphasized ; where the flow of capital presents increasing volatility, impacting different countries, markets and firms; where closed and family run companies are discovering the opportunities of the market capital to finance their investments and the challenges of their professionalization and succession processes.

In fact, many developing countries are increasingly internalizing the concepts of good corporate governance practices (transparency, accountability, fairness, responsibility and so on), through corporate governance codes, legal environment protecting minority shareholder rights, and self enforced market mechanisms to minimize information asymmetry among principals and agents and to provide a benign environment to the development of capital markets. At the same time, sustainable and socially responsible conduct of corporations area at the core of their decision making process. In other words, the opportunities and challenges of the real capitalism are wide spreading throughout different societies. Corporate Governance issues play a major role in this scenario.

Content:

CLASS TÓPICS
1.
• Presentations
• Objectives
• Alignment of expectations
• Methodology.
• Introduction – The concepto f Governance
2.

The Nature and Purpose of Corporations
BEAUCHAMP, T. & BOWIE, N. – Ethical Theory and Business
Chapter two – The Purpose of the Corporation
(stakeholder x stockholder view)
p. 45 – 105. printed


3.
Overview – Theories of Governance
• Separation of ownership and control.
• Agency x Stewardship Theory
• Enlightened Stakeholder Theory

DONALDSON, L. & DAVIS, J. - Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns. Australian Journal of Management, 16, 1, June 1991. DIGITAL

FAMA, E. JENSEN, M. – Separation of Ownership and Control” DIGITAL
JENSEN, M. – Value Maximization, Stakeholder Theory and the Corporate Objective Function, HBS, working paper, oct. 2001. ” DIGITAL

4.

25/08 Overview – Theories and the Mechanisms of Governance
TIROLE, Jean. 2006 The Theory of Corporate Governance. Princeton University Press, 2006. p. 15-73. DIGITAL
5.
Corporate Governance in Brazil and Worldwide
CLARKE, T. – Theories of Corporate Governance. Routledge, 2004. P. 1-31. Printed

6. Corporate Governance in Brazil and Worldwide
CLARKE, T. – International Corporate Governance – A Comparative Approach. Routledge, NY, 2007. Printed
ARMSTRONG, P. Thoughts on Corporate Governance and its Future, in FONTES FILHO, J.R., LEAL, R.P.C.(org.) O Futuro da Governança Corporativa: Desafios e Novas Fronteiras. São Paulo, IBGC, Ed. Saint Paul, 2013. CAP 1, pp 31-44. Printed

7.

Discussion: addressing the papers

8.


Governance in Not for Profit Organizations
MACHADO FILHO, CAP, MENDONÇA, L.; FISCHMANN, A.; GUERRA, S. – The Mechanisms of Governance in Nonprofit Organizations; Corporate Ownership and Control, v.4, n.2, pp 83-87, 2006/2007. DIGITAL

9.
Governance Structures – The Role of Boards
GUERRA, S.; FISCHMANN, AD.; MACHADO FILHO, CAP. – An Agenda for Board Research, Corporate Ownership and Control, v.6, n.3, pp 196-202, 2009. DIGITAL

CLARKE, T. – Boards and Directors: The Political Mechanisms of Corporate Governance. In International Corporate Governance – A Comparative Approach. Routledge, NY, 2007. Printed

10.

New Directions: Governance and Decision Making Process – The Role of Cognitive Sciences.

EES, H. V.; GABRIELSSON, J.; HUSE, M. – Toward a Behavioral Theory of Boards and Corporate Governance. Corporate Governance: An International Review, 2009, v. 17 n. 3, pp 307-319, May 2009. DIGITAL

BAILEY, Bernard C.& Peck, Simon I. – Boardroom Strategic Decision Making Style: Understanding the Antecedentes. Corporate Governance: An International Review, p.p 131-146, 2013. DIGITAL

11.
New Directions: Governance and Decision Making Process – The Role of Cognitive Sciences.

LEBLANC, R.; SCHWARTZ, M.S. – The Black Box of Board Process: gaining acess to a dificult subject. – Corporate Governance, v.15, n.5, p.p. 843-851, Sept 2007. DIGITAL
12.

Governance in Family Controlled Companies
SHARMA, Pramodita - An Overview of the Field of Family Business Studies: Current Status and Directions for the Future. Family Business Review, vol. XVII, no. 1, March 2004. DIGITAL

HOY, Frank – Book Review: Keeping the family business wealthy: How to plan for continuing growth, profitability and family leadership. Family Business Review, 25:117, 2012. DIGITAL

13.
Governance in Family Controlled Companies
Bammens, Y.; et. al. Voordeckers, W.; Van Gils, A.- Board of Directors in Family Business: A Literature Review and Research Agenda.– International Journal of Management Review. Vol 13, 2011.

Case Study
ROLE PLAY – Simulation of Board Meeting

14. Paper presentations
15.
Paper presentations

Avaliation methods:

Notes:

Bibliography:
BAILEY, Bernard C.&Peck, Simon I. – Boardroom Strategic decision Making Style: Understanding the Antecedentes. Corporate Governance: An International Review, , p.p 131-146., 2013. DIGITAL
BEAUCAMP, T. & BOWIE, N. – Ethical Theory and Business, Prentice Hall, 6 ed., 2001.

BECHT, M. , BOLTON, P. , ROELL, A. Corporate Governance and Control. NBER working paper series. Disponível: < http//www.nber.org/papers/w9371>
BLAIR, M. – Ownership and Control: Rethinking Corporate Governance for the Twenty first Century.
COFFEE Jr, J. What Caused Enron? A Capsule Social and Economic History of the 1990s. in CLARK, T. – Theories of Corporate Governance. Routledge, 2004.p.333-358.
CLARKE. T. Theories of Corporate Governance. Routledge. NY, 2004.
CLARKE, T. – International Corporate Governance – A Comparative Approach. Routledge, NY, 2007
CONFORTH, C. The Governance of Cooperatives and Mutual Associations: A Paradox Perspective. Annals of Public Cooperative Economics 75:1 2004 pp 11-32.
COLLI, Andrea and ROSE, Mary – Family Business, in Jones, Geoffrey and ZEITLIN, Jonathan - The Oxford Handbook of Business History, 2008.
DAVIS, D. SCHOORMAN, D., DONALDSON, L. Toward a Stewardship Theory of Management” in CLARK, T. – Theories of Corporate Governance. Routledge, 2004. P. 119-134.
DEMSETZ, H. – The Structure of Ownership and the theory of the Firm. Journal of Law & Economics, vol. XXXVI, june, 1983.
DIENHART, John W. Business, Institutions and Ethics. New York: Oxford University Press, 2000.
DE WIT, M., WADE, M., SCHOUTEN, E. – Hardwiring and Softwiring corporate responsibility: a vital combination. Corporate Governance, v.6, n.4, 2006.
DONALDSON, L. & DAVIS, J. - Stewardship Theory or Agency Theory: CEO Governance and Shareholder
Returns. Australian Journal of Management, 16, 1, June 1991
EES, H. V.; GABRIELSSON, J.; HUSE, M. – Toward a Behavioral Theory of Boards and Corporate Governance. Corporate Governance: An International Review, 2009v. 17 n. 3, pp 307-319, May 2009.
FAMA, E.F. , JENSEN, M. Separation of Ownership and Control. Journal of Law and Economics. Vol XXVI, junho, 1983.
FREEMAN, E. A Stakeholder Theory of the Modern Corporation. In: DIENHART, John W. Business, Institutions and Ethics. New York: Oxford University Press, 2000.
FRIEDMAN, Milton. The Social Responsibility of Business is Increase Its Profits. N.Y.: New York Times Magazine, 13 set., 1970. In: DIENHART, John W. Business, Institutions and Ethics. New York: Oxford University Press, 2000.
GARDBERG, N. & FOMBRUM, C. - Corporate Citizenship: Creating Intangible Assets across Institutional Environments. Academy of Management Review, v.31, n.2, p.p 329-346., 2006
GUERRA, S.; FISCHMANN, AD.; MACHADO FILHO, CAP. – An Agenda for Board Research, Corporate Ownership and Control, v.6, n.3, pp 196-202, 2009
GUERRA, S. – Is Blood Thicker than Money? Upsides, pp 15-19, abril 2007.
GORDON, J. What Enron Means for the Management and Control of the Modern Business Corporation: Some Initial Reflections. In CLARK, T. – Theories of Corporate Governance. Routledge, 2004. p. 322 – 332.
GORGA, E. Does Culture Matter for Corporate Governance? A Case Study of Brazil. Working paper 257, Stanford Law School, 2003.
GROENEWEGEN J. – Who should control the firm? Insights from New and original Institutional Economics. Journal of Economic Issues, v. XXXVIII, N.2, june 2004
HAAG, KAJSA - Rethinking family business succession - From a problem to solve to an ongoing practice JIBS Dissertation Series No. 082, Jönköping International Business School. DIGITAL
HALL, B. & KHURANA, R. – Al Dunlap at Sunbean – HBS - n.9-899-218, 2003.
HARVARD BUSINESS REVIEW – “HBS on Corporate Governance. HBS Business School Press, 2000.
HARVARD BUSINESS REVIEW – “Processo Decisório. Elsevier, ed. Campus, 2006.
HERRERO, Gabriel, CRUZ, Natália, MERINO, Elena. The Non Residual Claim Problem in Non Profit Organizations. International Society for New Institutional Economics, 6th Annual Conference, Cambridge, MA, 2002.
HOY, Frank – Book Review: Keeping the family business wealthy: How to plan for continuing growth, profitability and family leadership. Family Business Review, 25:117, 2012.
JENSEN, Michael. Value Maximization, Stakeholder Theory and the Corporate Objective Function. Boston: Harvard Business School. Working Paper 00-058, abr., 2000.
LA PORTA, R. et. al – Investor protection and Corporate Governance. John F. Kennedy School of Government.Harvard University. Faculty Research Working Papers Series, 2001.

LEVINSON, H – Conflicts that Plague Family Business. HBR, 1971.
MACHADO FILHO, CAP, MENDONÇA, L. ; FISCHMANN, A.; GUERRA, S. – The mechanisms of Governance in Nonprofit Organizations; Corporate Ownership and Control, v.4, n.2, pp 83-87, 2006/2007.
NASSREDDINE, G.; ANIS, J. – A Cognitive Approach to Corporate Governance: A Visualization Test of Mental Models with the Cognitive Mapping Technique. Journal fo defese Resource Management, v.3, n.1(4) 2012.
PANUNZI, F., BURKART, M., SHLEIFER, A. – Family Firms. Ssrn. http// papers.ssrn.com/abstract_id 298631
POLLAK, R. Transaction Cost Approach to families and householdes. Journal of Economic Literature 23: 581-608., 1985.
RAPPAPORT, A. Creating Shareholder value. The Free Press, N.Y, 1998. cap 1 – Shareholder Value and Corporate Purpose. P 01-12).
RAPPAPORT, A . New Thinking on how to link executive pay with performance. HBR - march-april, 1999.
RICHARDSON, R., LARCKER, D., TUNA, I. Does Corporate Governance Really Matter. ssrn. 2004.
SCHIEHLL E., OLIVEIRA DOS SANTOS, I. Ownership structure and composition of board of directors: evidence on Brazilian publicy-traded companies. RAUSP, v.39, n.4 out/dez 2004.
SILVEIRA, Alexandre Di M. da, LEAL, Ricardo P. C.; CARVALHAL-DA-SILVA, André L.; BARROS, Lucas A. B.. Evolution and Determinants of Firm-Level Corporate Governance Quality in Brazil. SSRN Working Paper Series. Jun. 20, 2007. Disponível em SSRN: .
SHLEIFER, A., VISHNY R.W. A Survey of Corporate Governance. The Journal of Finance. Vol.LII, n.2 1997.
STERNBERG, Elaine. The Stakeholder Concept: A Mistaken Doctrine. Leeds: Foundation for Business Responsibilities, Issue paper n.4. nov. 1999.
TIROLE, Jean. The Theory of Corporate Finance. Princeton University Press, 2006.
THE ECONOMIST ; The Good Company. A survey of corporate social responsibility Jan 22-28th, encarte, p.p3-16, 2005.
VAN DEN BERGHE, L.A.A & CARCHON, s. Agency Relations within family Business System: an explanatory approach. Corporate Governance, v.11, n.3, jul 2003.
WILLIAMSON, O. The Mechanisms of Governance. Oxford Universtity Press, 1996. p. 171-19 4.


APPRAISAL CRITERIA

The students will be evaluted based on their active participation during the course (seminars, exercises, group dynamics) and the elaboration of an academic paper related to some issues of the program.