The resources necessary to produce goods and services are scarce relative to the material wants and needs those goods and services satisfy. One way to lessen the scarcity problem is through increases in production due to specialisation. The concept applies to all factors of production but is most often associated with individuals and locations.
Issues and Challenges Robert G. Stock Options at U. Newspaper Narrative of Corporate Conflict Angela Powers and Robert Alan Brookey iii iv Foreword Corporate governance issues and challenges are rising in contemporary society because the size and complexity of firms is increasing, because the separation between ownership and control has increased, and because millions of investors have been harmed in recent years by aberrant and criminal behavior in large companies in North America and Europe.
The purpose of the workshop was to raise awareness and knowledge about corporate governance issues in media firms, to direct attention to the breadth and depth of the issue, and to spark new research on the issues involved.
The Media Management and Transformation Centre offers doctoral studies and research fellowships, provides research stipends to scholars studying relevant issues, and hosts conferences and workshops for researchers and media personnel that are designed to improve knowledge and understanding of media business issues.
Presentations at the workshop addressed questions central to corporate governance such as who are the owners of media companies and what are the structures of that ownership, what are the structures of governance in companies based in different legal and business environment, what are the roles of management in the governance processes, how are issues of management accountability and compensation handled in media firms, what types of persons are involved in corporate governance and management, and what can happen when there are problems in corporate government processes and performance.
Ultimately these questions were linked to issues of corporate strategy and behavior, company performance, corporate citizenship, and content influences.
The chapters in this volume reveal a great deal about governance issues in media firms and provide evidence that media firms—which are often critical of governance of firms in other industries—need to put their own houses in order regarding such issues.
The research shows that structures and processes of governance and accountability have significant impact on the behavior of media firms and their effects on their content, other firms, and the public.
Issues and Challenges Corporate Governance: Picard Corporate governance issues have risen to prominence in recent years as a result of corporate scandals and misbehavior of executives.
Firms, board members, and executives have been subject to criminal and civil actions over hidden debt, inflated earnings, insider trading, tax evasion, misuse of funds, and breaches of fiduciary duties. Companies such as Enron, WorldCom, and Tyco became well known because of massive failures in governance.
Serious governance problems have also been evident in media firms as well. Shareholder lawsuits charging boards and executives at media companies with ignoring interests of shareholders have been filed against most major media companies in recent years, including Bertelsmann, Walt Disney Co.
Such developments have focused attention on the need for transparency and trust between firms, investors, and the public. They have raised governance issues related to representation on boards of directors, authority and responsibilities of directors, independence of directors, independence of financial auditors, clarity and independence in determining executive compensation, and relations between boards and executives.
Debates over corporate governance are fundamentally related to concepts of capital, ownership, control, and management and the importance of governance issues are increased when companies offer shares on stock markets.
This chapter lays out the context of governance, its relevance to media firms, and principles associated with good governance. Subsequent chapters explore specific issues relating to governance and cases in which serious governance issues have emerged in media companies.
The progression of business ownership and management during the past three centuries from entrepreneurial capitalism to family capitalism to management capitalism has meant that owners have been progressively separated from business activities in many firms and today tend to rely upon hired agents chief executive officers, chief operating officers, chief financial officers, and others to provide management for the firms.
Corporate governance is concerned with the owner and management relationships, distribution of power, and accountability in corporations.
Governance structures and processes are inextricably linked to the environments in which corporations are created and operate.
Corporations are legally created entities with specific rights and responsibilities, and these differ depending upon the nation in which they were established, their structures, and whether shares are privately held or publicly traded. Publicly traded firms typically have more significant corporate governance responsibilities under law and in regulations established by the stock markets on which their shares are traded.
Governance is thus a function directed by the integrated principles and requirements in corporate law, securities law, stock market rules, and accepted accounting standards.
If one considers differences in North American and European contexts, for example, there is an Anglo-American tradition in which a strong shareholder orientation influences governance structures and processes.
In continental Europe, however, many nations have a different stakeholder orientation in which the interests of communities, labor, and social organizations in governance are often recognized.
In some countries and legal traditions, companies are governed by a single board of directors, whereas in others there is a dual board that splits strategic and operational activities from supervisory functions such as financial monitoring and other fiduciary responsibilities.
In some countries there are no requirements for board membership; in others there are specific educational and competence requirements. When one considers corporate governance issues, then, one must be cognizant of the specific environment in which a firm operates because it influences the structures and strength of governance and the conditions under which ownership and management influences take place.
Issues and Challenges Agency theory has emerged to explain tensions and conflicts that result from this form of management. It recognizes that agents and owners can have different and conflicting goals, risk preferences, information asymmetry, and needs to maximize certain factors at the expense of others Eisenhardt, In the traditional view of agency theory, diffusion of ownership is seen as leading to less control over management, which can result in inefficiency and declining performance Berle Jr.
A corporate governance school of thought has emerged based on the idea that owners are supposed to act and influence firms, to pressure and influence management, and to protect their interests as owners. Shareholders thus should engage in active ownership and large owners who are active over time are seen as adding value to the firm Carlsson, The range of interests represented by corporate stakeholders is critical to what choices are made by firms and to the locations of power to make those choices within the firms.
Power and strategic control can be in the hands of the board of directors or the CEO depending upon their nature and personalities, upon power-sharing arrangements between them, and upon the activism of directors and major investors.
If too much strength is given to either the directors or the CEO, strategic and operational difficulties and—sometimes— practices that ignore interests of shareholders can develop.In some cases, ownership of 10 per cent of ordinary shares or voting power may not lead to the exercise of any significant influence while, on the other hand, a direct investor may own less than 10 per cent but have an effective voice in the benjaminpohle.com OECD does not recommend any qualifications to the 10 per cent rule, consequently.
lar, it explores the reasons why some countries or regions have performed better than others in the long run. Essays in Volume II of this publication contribute to this approach, as well as examining why the performance in a given country or group of countries has improved or deteriorated in the long-.
The Community energy policies do not fulfil the requirements of a common policy mainly because of the divergences apparent among the various member states and, more importantly, because of the lack of a mandate in any of the Treaties to adequately cover all aspects of energy. ï»¿ A FR IC A DEV EL OPM ENT FORUM The Informal Sector in Francophone Africa Firm Size, Productivity, and Institutions Nancy Benjamin and Ahmadou Aly Mbaye with Ibrahima.
2. What are some of the advantages and disadvantages that people in Latvia will experience as the country moves toward free markets. Explain how a mixed economy would alleviate some of the problems. 3. What advantages do Latvian firms have over firms in the United States and Germany, if .
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