Overview

The content may include but will not be limited to the form and functions of modern corporations, the role and purpose of economic regulation and the development and the role of corporate governance systems and codes. In this module we will explore the importance of corporate ownership and control, the role of the board and professions in corporate governance arrangements. This discussion will be augmented through consideration of the performance and remuneration of senior management and current International issues of corporate governance and regulation. In particular, drawing on economic theory the module will examine how executive compensation contracts provide incentives for executives to behave in specific ways, what the benefits are of a heterogeneous board of directors, what effects might one expect from gender differences, how firms can set their compensation policy to enhance effort, and the increasing importance of culture in affecting executive behaviour and firm performance. The module will help to develop understanding by considering whether theoretical predictions are supported by empirical evidence.

Assessment Strategy

-threshold -D- to D+ Demonstration of the required knowledge and techniques but with significant mistakes and little development of the subject beyond lecture material. -good -B- to B+ Clear understanding of the subject, together with evidence of investigation and understanding of the research literature, but with some theoretical or practical minor errors. -excellent -A- to A+ Excellent grasp of the concepts and techniques together with significant evidence of engagement and understanding of the research papers in this area. -another level-C- to C+ Demonstration of the required knowledge and techniques but with mistakes and little development of the subject beyond lecture material.

Learning Outcomes

• Critically appraise regulatory actions and proposals to reform compensation arrangements including the emerging importance of corporate culture within firms.

• Critically appraise the roles through which corporate governance is realised, including the role of the board of directors, the rights and responsibilities of company owners and the positions of other stakeholders in the firm.

• Critically discuss the behaviour and form of the social, economic, political and legal systems that govern the modern firm.

• Critically discuss the incentive structures that are implicit in executive compensation contracts affects the behaviour of executive officers, which, in turn, affects firm performance outcomes; and to consider whether firms can use compensation policy to deliver performance gains.

• Critically explain methods concerned with the assessment of both corporate governance and regulation, internal and external to the firm.

• Examine similarities and differences which exist across different corporate governance systems in both the UK and other modern nation states.