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Corporate Governance

Course code
FIN608
Course type
MSc Course
Weekly Hours
2,5
ECTS
5.0
Term
HS 2021
Language
Englisch
Lecturers
Prof. Dr. Christian Andres
Please note that exchange students obtain a higher number of credits in the BSc-program at WHU than listed here. For further information please contact directly the International Relations Office.

The module offers a theoretical and empirical analysis of the main corporate governance issues where corporate governance refers broadly to the mechanisms which deal with the principal-agent problems between insiders and outsiders of corporations. The module looks at the variety of legal systems and other institutions, ownership structures, boards of directors, executive compensation, the relationship between corporate governance and firm value, and governance regulation. A strong emphasis is put on the analysis of how and through which channels corporate governance matters for firm-level and country-level economic performance and whether firm-level actions are effective.

We will analyze conflicts of interest within the firm and discuss mechanisms to mitigate these problems. Since corporate governance mechanisms vary around the world, the course will briefly present definitions and the underlying concepts and cover the main taxonomies of corporate governance systems developed by financial economists and legal scholars. In addition, the relationship between firm value and corporate governance practices and investor protection will be discussed. In this context, we will also cover Environmental, Social, and Governance (ESG) attributes and the question of how ESG activity is related to firm performance.

We will critically assess the empirical evidence on the importance and effectiveness of various corporate governance devices. Special emphasis will be on ownership structures and large shareholder monitoring, the market for corporate control, shareholder activism, the board of directors, codetermination, and executive compensation.

The teaching style will be a combination of classical classroom teaching, group work on cases, and discussion.

Date Time
Wednesday, 27.10.2021 15:30 - 18:45
Monday, 08.11.2021 15:30 - 18:45
Monday, 15.11.2021 15:30 - 20:30
Thursday, 18.11.2021 11:30 - 15:15
Wednesday, 01.12.2021 17:15 - 20:30
Thursday, 02.12.2021 15:30 - 18:45
Tuesday, 07.12.2021 15:30 - 18:45
Thursday, 16.12.2021 09:00 - 10:30
Agency Theory, Game Theory, Econometric Techniques

By the end of this course, students should be able to:

  1. Contrast different definitions of corporate governance
  2. Critically review the principal-agent model
  3. Describe differences in corporate control across the world
  4. Explain the reasons why control may be different from ownership (rights)
  5. Compare the main classifications of corporate governance systems
  6. Assess the effectiveness of the different corporate governance mechanisms, such as for example the board of directors, large shareholder monitoring, etc.
  7. Critically assess the empirical evidence on the importance and effectiveness of various corporate governance mechanisms
Goergen, Marc (2018).Corporate Governance - A Global Perspective, Cengage. A detailed list of papers and additional readings will be distributed by the beginning of the module
Interactive Lecture, Case Studies
Final Exam (60%), Cases (40%)
Introductory Corporate Finance course, Game Theory (recommended)
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