| List of figures | p. xi |
| List of tables | p. xiii |
| Acknowledgments | p. xv |
| The author | p. xvi |
| The Function of Corporate Governance | p. 1 |
| Governance defined | p. 3 |
| The re-emergence of governance | p. 3 |
| Basic corporate structure | p. 11 |
| Limited liability, equity investors, and debt holders | p. 11 |
| Value maximization and the search for enterprise value | p. 14 |
| Diffusion, control, and the agency problem | p. 17 |
| Forms of ownership and control | p. 20 |
| Accountability and the need for corporate governance | p. 22 |
| Internal governance | p. 24 |
| External governance | p. 24 |
| The benefits of governance | p. 30 |
| Internal governance mechanisms: corporate accountability | p. 32 |
| The board of directors | p. 34 |
| Executive management | p. 42 |
| Internal control groups | p. 44 |
| Code of conduct | p. 47 |
| Implementation of internal governance measures | p. 48 |
| Best practice codes | p. 50 |
| External governance mechanisms: systemic accountability | p. 54 |
| Regulatory oversight | p. 54 |
| Legal/bankruptcy regimes | p. 56 |
| Capital markets access | p. 59 |
| Corporate control activity | p. 61 |
| Mergers, acquisitions, and spin-offs | p. 65 |
| LBOs and MBOs | p. 67 |
| Antitakeover defenses | p. 68 |
| Block holder monitoring | p. 70 |
| Activist institutional investor monitoring | p. 74 |
| External audits | p. 77 |
| Credit rating agency review | p. 79 |
| Protecting internal and external stakeholders | p. 83 |
| Direct and indirect stakeholders | p. 85 |
| Shareholders | p. 86 |
| Labor/employees | p. 88 |
| Creditors | p. 90 |
| Customers and suppliers | p. 94 |
| Professional service providers | p. 96 |
| Communities | p. 97 |
| Indirect stakeholders | p. 98 |
| Protecting stakeholders | p. 99 |
| Corporate Governance Problems | p. 101 |
| Common failures in the governance process | p. 103 |
| Flaws in governance | p. 103 |
| Detecting governance flaws | p. 105 |
| Failure of board directors and executive management | p. 106 |
| Ineffective boards | p. 107 |
| Breach of duties of care and loyalty | p. 115 |
| Entrenched management | p. 115 |
| Failure of corporate policies | p. 116 |
| Failure of internal controls | p. 131 |
| Lack of technically qualified, independent controls | p. 132 |
| Liberal accounting policies | p. 133 |
| Excessive risk-taking | p. 134 |
| Inadequate internal audits | p. 135 |
| Failure of external controls | p. 136 |
| Inadequate regulatory mechanisms | p. 136 |
| Insufficient legal/bankruptcy regimes | p. 140 |
| Lack of block holder/activist investor monitoring | p. 140 |
| Weak/underdeveloped capital markets | p. 141 |
| Misguided/insufficient corporate control activity | p. 143 |
| Unacceptable external audit practices | p. 144 |
| The impact of governance problems on corporate operations | p. 147 |
| First stage impact: reputational damage | p. 150 |
| Second stage impact: early financial problems | p. 151 |
| Third stage impact: growing financial distress | p. 154 |
| Fourth stage impact: bankruptcy | p. 157 |
| The impact of bankruptcy on stakeholders | p. 159 |
| Studies in flawed governance I: companies | p. 166 |
| Company studies | p. 170 |
| Enron, USA | p. 170 |
| Arthur Andersen, USA | p. 175 |
| WorldCom, USA | p. 179 |
| Tyco International, USA/Bermuda | p. 185 |
| Adelphia Communications, USA | p. 189 |
| Allfirst/Allied Irish Bank, USA/Ireland | p. 192 |
| Waste Management, USA | p. 196 |
| SAirGroup (Swissair), Switzerland | p. 200 |
| Vivendi, France | p. 204 |
| Daewoo Group, Korea | p. 208 |
| Asea Brown Boveri, Sweden/Switzerland | p. 211 |
| Kirch Media, Germany | p. 214 |
| Ahold, the Netherlands | p. 217 |
| Lernout and Hauspie, Belgium | p. 220 |
| Global Crossing, USA/Bermuda | p. 223 |
| HealthSouth, USA | p. 226 |
| Studies in flawed governance II: sectors and industries | p. 231 |
| Global external auditors | p. 232 |
| US energy trading companies | p. 239 |
| Japanese sokaiya scandals | p. 244 |
| US investment banking and research | p. 247 |
| Indonesian business and banking groups | p. 250 |
| Corporate Governance Reforms | p. 257 |
| Strengthening the governance process I: micro reforms | p. 259 |
| Strengthening the board of directors and executive management | p. 261 |
| Establishing active, independent, and responsive boards | p. 262 |
| Reducing board size | p. 264 |
| Creating technically expert, independent board committees | p. 264 |
| Separating the roles of chairperson and CEO | p. 271 |
| Aligning board director interests | p. 274 |
| Limiting D&O insurance coverage | p. 274 |
| Piercing the corporate veil for directors and executives | p. 275 |
| Reducing information asymmetries | p. 276 |
| Refocusing corporate policies | p. 276 |
| Developing rational compensation standards | p. 277 |
| Creating effective disclosure | p. 279 |
| Supporting shareholder rights | p. 281 |
| Returning excess capital | p. 283 |
| Defining and publicizing strategy | p. 283 |
| Developing and demonstrating a long-term perspective | p. 284 |
| Engaging institutional investors | p. 285 |
| Enhancing internal controls | p. 286 |
| Developing proper accounting policies | p. 286 |
| Enhancing internal audit | p. 287 |
| Reinforcing a culture of risk management | p. 287 |
| Implementing crisis management programs | p. 288 |
| Conducting effective post-mortems | p. 289 |
| Strengthening the governance process II: macro reforms | p. 291 |
| Promoting changes in regulatory oversight | p. 292 |
| Regulating potential conflicts of interest | p. 293 |
| Promoting uniform and meaningful accounting rules | p. 294 |
| Developing proper regulatory disclosure | p. 295 |
| Encouraging long-term investment | p. 297 |
| Protecting assets, investments, and pensions | p. 297 |
| Enhancing general governance mechanisms | p. 298 |
| Strengthening legal frameworks and bankruptcy processes | p. 299 |
| Deepening capital markets and promoting corporate control activity | p. 301 |
| Enhancing external audit practices | p. 303 |
| Encouraging investor activism | p. 304 |
| The legislative angle: the example of Sarbanes--Oxley | p. 307 |
| Creating a Public Company Accounting Oversight Board | p. 308 |
| Ensuring auditor independence and establishing an audit committee | p. 309 |
| Assigning corporate responsibility | p. 311 |
| Enhancing financial disclosures | p. 312 |
| Resolving analyst conflicts of interest | p. 313 |
| Assigning accountability for corporate and criminal fraud | p. 314 |
| Expanding white collar crime penalties | p. 314 |
| The international view of S--O | p. 315 |
| Improving corporate ethics | p. 318 |
| Corporate ethics versus corporate responsibility | p. 319 |
| Creating and reinforcing a proper ethical culture | p. 320 |
| Ethical norms | p. 323 |
| Ethical behavior and internal governance mechanisms | p. 325 |
| Summary: towards substantive governance | p. 327 |
| Simple rules of substantive governance | p. 328 |
| Can governance changes work? | p. 332 |
| Implementing global best practice | p. 335 |
| Supranational | p. 338 |
| OECD | p. 338 |
| BIS | p. 340 |
| European Union | p. 342 |
| Australia | p. 344 |
| Belgium | p. 345 |
| Brazil | p. 348 |
| Canada | p. 349 |
| France | p. 352 |
| Germany | p. 354 |
| Italy | p. 356 |
| Japan | p. 359 |
| Korea | p. 361 |
| Malaysia | p. 364 |
| The Netherlands | p. 366 |
| Singapore | p. 368 |
| South Africa | p. 371 |
| Spain | p. 374 |
| Sweden | p. 376 |
| Switzerland | p. 377 |
| United Kingdom | p. 380 |
| United States | p. 384 |
| Notes | p. 390 |
| The language of governance | p. 463 |
| Selected bibliography | p. 483 |
| Index | p. 490 |
| Table of Contents provided by Ingram. All Rights Reserved. |
