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Full-Text Articles in Law
The Checks And Balances Of Good Corporate Governance, John Lessing
The Checks And Balances Of Good Corporate Governance, John Lessing
John Lessing
Good corporate governance requires a range of regulatory checks and balances - or mechanisms - to be effective. If one mechanism fails, the system will fail like a chain with a weak link. This article provides an overview and brief explanation of the main checks and balances a country needs to have a good corporate governance system. It is of particular relevance to countries with transition economies. However, it is also important in developed countries as recent corporate collapses and failures in the financial system have illustrated.
Barriers To Effective Risk Management, Michelle M. Harner
Barriers To Effective Risk Management, Michelle M. Harner
Michelle M. Harner
“As long as the music is playing, you’ve got to get up and dance. We’re still dancing.”** This now infamous quote by Charles Prince, Citigroup’s former Chief Executive Officer, captures the high-risk, high-reward mentality and overconfidence that permeates much of corporate America. These attributes in turn helped to facilitate a global recession and some of the largest economic losses ever experienced in the financial sector. They also represent certain cognitive biases and cultural norms in corporate boardrooms and management suites that make implementing a meaningful risk culture and thereby mitigating the impact of future economic downturns a challenging proposition. The …
Barriers To Effective Risk Management, Michelle M. Harner
Barriers To Effective Risk Management, Michelle M. Harner
Michelle M. Harner
“As long as the music is playing, you’ve got to get up and dance. We’re still dancing.”** This now infamous quote by Charles Prince, Citigroup’s former Chief Executive Officer, captures the high-risk, high-reward mentality and overconfidence that permeates much of corporate America. These attributes in turn helped to facilitate a global recession and some of the largest economic losses ever experienced in the financial sector. They also represent certain cognitive biases and cultural norms in corporate boardrooms and management suites that make implementing a meaningful risk culture and thereby mitigating the impact of future economic downturns a challenging proposition. The …
Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner
Ignoring The Writing On The Wall: The Role Of Enterprise Risk Management In The Economic Crisis, Michelle M. Harner
Michelle M. Harner
Enterprise risk management (ERM) targets overall corporate strategy and, when implemented correctly, can manage a corporation’s risk appetite and exposure. When ignored or underutilized, it can contribute to a corporation’s demise. In fact, many commentators point to ERM failures as contributing to the severity of the 2008 economic crisis. This essay examines the different approaches to ERM adopted by financial institutions affected by the 2008 economic crisis and how ERM contributed to the survival or failure of those firms. It then considers ERM in the broader context of corporate governance generally. This discussion reflects on ERM techniques for corporate boards …
Shareholder Primacy And The Business Judgment Rule: Arguments For Expanded Corporate Democracy, Robert Sprague, Aaron Lyttle
Shareholder Primacy And The Business Judgment Rule: Arguments For Expanded Corporate Democracy, Robert Sprague, Aaron Lyttle
Robert Sprague
There is a fundamental flaw in the law’s approach to corporate governance. While shareholder primacy is a well-established norm within U.S. corporate law, the business judgment rule essentially holds directors blameless when they fail to maximize shareholder wealth. During the past century, control of the corporation has passed from shareholders to managers. As a result, shareholders have little practical say in who runs the corporation, even though they cannot usually hold managers legally liable when those managers destroy shareholder wealth through incompetence. Despite a number of arguments asserting that shareholders do not deserve any additional management powers, this article concludes …