College of Management of Technology Institute of Technology Policy Chair MIR Management of Network Industries Prof.

. Matthias Finger Spring semester 2009 February 20th May 29th 2009 Course location: ODY16

Minor/Master MTE

Corporate Governance
Introduction
Within the broader context of globalisation, liberalisation and deregulation, all organizations from private to public to non-governmental are currently undergoing significant changes. One of the major dimensions of these changes pertains to the way organizations in general and firms in particular are governed and relate to their shareholders (owners) and stakeholders, otherwise known as corporate governance. Corporate governance has indeed become, over the past years, the focus of increased attention both inside and outside boardrooms: directors, investors, stakeholders, and regulators are watching more and more carefully that organizations are governed efficiently, effectively, ethically, and that financial and other risks are being taken into account.

understanding of the mechanisms, as well as an overview of the particular issues of corporate governance today. Indeed, many recent problems of quite reputable and firmly established corporations e.g., Swissair, Enron, Arthur Andersen, Parmalat, Adecco, Yukos, Barings, Worldcom, UBS have highlighted the importance of, and sometimes the need for, better corporate governance. On the other hand, start-ups also need good corporate governance in order to succeed. As a matter of fact, it is today generally admitted that there exists a relationship between governance practices and corporate performance. As a consequence, increasing attention is being paid lately to questions of how firms and all other organizations for that matter are being governed and how they relate to shareholders in particular and to stakeholders in general. The course addresses this broad issue.

Overview of content
More precisely, this course will address corporate governance from an organizational and institutional point of view: it will illustrate how corporate governance has evolved over time and will cover both theory and relevant practices. In terms of content, it will highlight the main issues of corporate governance (e.g., the relationships between the owners, the board, and firm management, and the relationships between the company and its major stakeholders); provide concrete examples of good and bad corporate governance; outline key principles of corporate governance; and finally, discuss the relevant theories underlying corporate governance practices (e.g., theories of organizations, institutions, governance, organizational behavior, leadership, new institutional economics, power, and agency).

Course objectives
The purpose of this course is to offer engineers an appreciation of the importance, an

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Course methodology and structure

The course is structured along the historical evolution of both theory and practice, as shown in the below graphics:

7. International corporate governance practices 8. Principles of corporate governance 9. Financial markets institutional investors and corporate governance

10. Evolving societal demands on corporations 11. Stakeholder theory, socially responsible investment 12. Business regulation. future issues in corporate governance ----------------------------------------------------------------

More precisely, the course is structured into thirteen sessions. Each session is, in principle, divided into two hours of lecture and one hour of group work/seminar, during which participants will analyze, present, and critically discuss the cases they have chosen to study. Guest speakers will also be invited. Follows a short description of each session (112), distinguishing between more practice- and more theory-oriented sessions:
---------------------------------------------------------------------Practice Theory/concepts 1. Introduction 2. Emergence of the modern corporation; separation of ownership and control 3. Principal agent theory 4. Dispersion of capital; evolution of the corporation 5. New Institutional Economics 6. Structures of corporate governance

The course will be taught on Fridays (915 11:45 with one 30 break).

Course readings
There will be one compulsory reading per session (except for sessions 1 and 13). These readings will be made available on the intranet. This syllabus also contains a detailed bibliography, as well as a list of relevant cases. Below, one finds a list of three particularly relevant textbooks. During the course, participants are expected to read at least one of them.
Colley, J., Doyle, J., Stettinius, W., & G. Logan (2003). Corporate governance: the McGrawHill Executive MBA Series. New York: McGraw-Hill. Kim, K. & J. Nofsinger (2007). Corporate Governance. Upper Saddle River, NJ: Pearson Education Inc. (2nd edition). Mallin, C. (2004). Corporate governance. Oxford: Oxford University Press.

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Course pedagogy and cases

While the course offers substantial conceptual input, cases will often be used to illustrate any given concept, theory, argument. As part of their semester work, participants are required to choose a case, which they will then analyze, present, and discuss from a particular angle (see Requirements below). The course is structured into 13 separate sessions, each of which is again subdivided into a 90 lecture and a 45 seminar. The lecture is given by the professor, while the seminar discusses the cases elaborated by the participants under the supervision of the professor. For each session, there is a compulsory reading, which will be made available on the intranet.

Structure by sessions Session 1 February 20th 2009, 9-12: Introductory lecture

Main session (90) Introductory lecture: 1. The corporation in society 2. Why is corporate governance important? 3. The courses approach to corporate governance Definition of and agreement on the participants work

Seminar (45)

Session 2 February 27th 2009, 9-12: The basic model

Main session (90) Overview on corporate governance, main elements: 1. What is a corporation? 2. Separation of ownership and control 3. The basic model of corporate governance Definition of participants work Monks, M.G. and N. Minow (2004). Corporate Governance, London: Blackwell Publishing, pp. 98-118.

Seminar (45) Readings for this session

Session 3 March 6th 2009, 9-12: Theoretical elements of corporate governance

Main session (90) Seminar (45) Reading for this session The theory underlying the basic model Presentation of cases from previous courses (Finger) Roe, M. (2005). Institutions of Corporate Governance. In: Mnard, C. & M. Shirley (eds.). Handbook of New Institutional Economics. Berlin: Springer, pp. 371- 399.

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Session 4 March 13th 2009, 9-12: Dispersion of capital

Main session (90) The evolution of the capital market: 1. The emergence of shareholder capitalism 2. Implications on corporate governance Dr. Boris Nikolov, EPFL Blair, M. (1995). Ownership and control. Rethinking corporate governance for the twenty-first century. Washington: The Brookings Institution, pp. 28-44.

Seminar (45) Reading for this session

Session 5 March 20th 2009, 9-12: More theory

Main session (90) Seminar (45) Reading for this session The fragmentation of capital and the emerging theory of New Institutional Economics Discussion of advancement of work Jensen, M. (2000). A Theory of the Firm. Governance, Residual Claims, and Organizational Forms. Cambridge: Harvard University Press, chapter 4 Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure, pp. 83- 135.

Session 6 March 27th 2009, 9-12: Structures of corporate governance

Main session (90) Seminar (45) Reading for this session The key structural elements of corporate governance: directors and board structure Discussion of advancement of participants work Mallin, C. (2004). Corporate governance. Oxford: Oxford University Press, chapter 8: Directors and board structure, pp. 93-108.

Session 7 April 3rd 2009, 9-12: International corporate governance practices

Main session (90) Seminar (45) Reading for this session The implementation of corporate governance mechanisms and institutions beyond industrialized countries Discussion of advancement of work Doidge, C. Karolyi, G. & R. Stulz (2007). Why do Countries Matter so much for Corporate Governance. Journal of Financial Economics, 86, pp. 1-39.

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Session 8 April 24th 2009, 9-12: Principles of corporate governance

Main session (90) The definition of principles of corporate governance: 1. Why principles 2. The main principles Guest speaker: Me Cyril Sauthier OECD 2004 principles of corporate governance: www.oecd.org/dataoecd/32/18/31557724.pdf

Seminar (45) Reading for this session

Session 9 May 1st 2009, 9-12: Financial markets, institutional investors, and corporate governance
Main session (90) Seminar (45) Reading for this session The growing importance of institutional investors Guest speaker: Prof. Anne Christine DArcy, HEC, UNIL Davis, P. (2002). Institutional Investors, Corporate Governance and the Performance of the Corporate Sector. Economic Systems, 26, pp. 203-229.

Session 10 May 8th 2009, 9-12: Evolving societal demands on corporations

Main session (90) Seminar (45) Readings for this session Growing pressure and demands on corporations as a result of societal evolution Guest speaker: Mr. Jean Laville, ETHOS Post, J., Lawrence, A. & J. Weber (2002). Business and society. Corporate strategy, public policy, ethics. Boston: McGraw-Hill, chapter 2: Business and public issues, pp. 29-54.

Session 11 May 15th 2009, 9-12: Stakeholder theory; socially responsible investment
Course taught by Dr. Marc Laperrouza, EPFL Main session (90) From shareholders to stakeholders: a new theoretical perspective The corporations response to their politization: 1. Socially responsible investment 2. Corporate social responsibility 3. Business ethics Seminar (45) Guest speaker: Prof. Guido Palazzo, HEC, UNIL Readings for this Verstegen Ryan, L. (2005). Corporate Governance and Business session Ethics in North America: The State of the Art. Business & Society, Vol.44, No.1., pp.40-73.

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Session 12 May 22nd 2009, 9-12: Business regulation; new issues in corporate governance
Main session (45) The growing politization of governance and the emergence of (global) business regulation Emerging issues in corporate governance: 1. Corporate governance and innovation 2. Corporate governance and long-term investments 3. Corporate governance in globalized companies Discussion of participants work progress Miozzo, M. & P. Dewick (2002). Building Competitive Advantage: Innovation and Corporate Governance in European Construction. Research Policy, 31, pp.989-1008.

Seminar (90) Reading for this session

Session 13 May 29th 2009, 9-12: participants presentations

Main session (135) Participants presentations

Course requirements
The students will be graded on the basis of a written document (70% of the grade; see below) and active participation, including an oral presentation of their work during one of the seminars (30% of the grade). The written document will be approximately 20 pages long (Times Roman 12; single space) and cover the following elements: A problem statement, related to one of the topics addressed in the course (2 pages) The presentation of a case (5 pages) The identification of the main governance problem(s) of that case (3 pages) The analysis of the identified problem(s) from the perspective of (at least) one of the theoretical frameworks discussed in the course; including the summary of the relevant theoretical elements (5 pages) Introduction, conclusion, references, consulted sources, etc. (5 pages) This written document will have to be submitted (via email) at the latest on May 25th 2008, midnight. The oral presentation will be scheduled on May 1st (session 9) and will take place on Friday May 29th (eventually also on Friday May 22nd). Each participant has approx. 10 for his/her presentation, which should cover (a) the presentation (5) and (b) the analysis of the case (again 5). There will be 5 for the discussion of each participants work.

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Bibliography, journals, and websites

Resources on corporate governance abound. Here below is a comprehensive but not exhaustive list of references including books, articles, journals, and relevant actors and websites. Books Alexander, L. (1999). Globalizing the board of directors: trends and strategies. New York: Conference Board. Alexander, L. (2000). Corporate governance and cross-border mergers. New York: Conference Board. Allen, F. & D. Gale (2002). A Comparative Theory of Corporate Governance. Wharton Financial Institutions Centre. Allen, F. & Gale D. (2007). Understanding Financial Crises. Oxford : Oxford University Press Alkhafaji, A. (1989). A stakeholder approach to corporate governance. New York: Quorum Books. Anand, S. (2007). Essentials of corporate control. New York: John Wiley. Bain, N. (2008). The effective director: building individual and board success. London: Institute of Directors. Bainbridge, S. (2008). The New Corporate Governance in Theory and Practice. New York : Oxford University Press Bebchuk, L. & J. Fried (2004). Pay Without Performance: The Unfulfilled Promise of Executive Compensation. Boston: Harvard University Press. Berenbeim, R. (1996). The corporate board: a growing role in strategic assessment. New York: Conference Board. van den Berghe, L. (1999). International standardisation of good corporate governance: best practices for the board of directors. Boston: Kluwer Academic Press. van den Berghe, L. (2002). Corporate governance in a globalising world: convergence or divergence? A European perspective. Boston: Kluwer Academic Publishers. Blair, M. (ed.) (1993). The Deal decade: what takeovers and leveraged buyouts mean for corporate governance. Washington: Brookings Institution. Blair, M. (1995). Ownership and control. Rethinking corporate governance for the twenty-first century. Washington: The Brookings Institution. Brancato, C. K. (1997). Institutional investors and corporate governance: best practices for increasing corporate value. Chicago: Irwin Professional Publishers. Cadbury, A. (2002). Corporate governance and chairmanship: a personal view. Oxford: Oxford University Press. Calderini, M., Garrone, P. & M. Sobrero (eds.) (2003). Corporate governance, market structure and innovation. Cheltenham: Edward Elgar. Carlsson, R. H. (2001). Ownership and value creation: strategic corporate governance in the new economy. Chichester: John Wiley & Sons. Carter, C. & J. Lorsch (2003). Back to the Drawing Board: Designing Corporate Boards for a Complex World. Cambridge: Harvard Business School Press. Chew, D. H. (1997). Studies in international corporate finance and governance systems: a

-- 8 -comparison of the U.S., Japan, and Europe. Oxford: Oxford University Press. Clarke, T. (ed.) (2004). Theories of corporate governance. London: Routledge. Clarke, T. (2007). International corporate governance: a comparative approach. London. Coffee, J. (2005). Gatekeepers: The Professions and Corporate Governance. Oxford: Oxford University Press. Cohen, S. & G. Boyd (eds.) (2000). Corporate governance and globalization: long range planning issues. Cheltenham: Edward Elgar. Colley, J., Doyle, J., Stettinius, W. & G. Logan (2003). Corporate Governance: The McGrawHill Executive MBA Series. New York: McGraw-Hill. Conger, J. A. (2001). Corporate boards: strategies for adding value at the top. San Francisco: Jossey-Bass. Crawford, C.J. (2007) Compliance & Conviction: The Evolution of Enlightened Corporate Governance. Santa Clara : XCEO Dallas, G. (2004). Governance and risk. New York: McGraw-Hill. Davies, A. (1999). A strategic approach to corporate governance. Aldershot: Gower. Dimma, W. A. (2002). On the board: best practices in corporate governance. New York: John Wiley. Donahue, J. D. & J. S. Nye, Jr. (eds.) (2001). Governance amid bigger, better markets. Washington, D.C.: Brookings Institution Press. Dow, G. (2003). Governing the firm. Workers control in theory and practice. Cambridge: Cambridge University Press. Downes, G. R. (1999). Institutional investors and corporate behavior. Washington: The AEI Press. Foss, N. & V. Mahnke (2000). Competence, governance, and entrepreneurship: advances in economic strategy research. Oxford: Oxford University Press. Franklin, A. & D. Gale (2002). A Comparative Theory of Corporate Governance. University of Pennsylvania: Wharton Financial Institutions Center. Fraser, A. W. (1998). Reinventing aristocracy: the constitutional reformation of corporate governance. Aldershot: Ashgate. Fukao, M. (1995). Financial integration, corporate governance, and the performance of multinational companies. Washington, D.C.: Brookings Institution. Garratt, B. (2003). Thin on Top. Why corporate governance matters and how to measure and improve board performance. London: Nicholas Brealey Publishing. Gillan, S.L. & L.T. Starks (2003). Corporate Governance, Corporate Ownership, and the Role of Institutional Investors: A Global Perspective. John L. Weinberg Center for Corporate Governance, University of Delaware. Goergen, M. (1998). Corporate governance and financial performance: a study of German and UK initial public offerings. Cheltenham: Edward Elgar. Gospel, H. & A. Pendleton (2005). Corporate Governance and Labour Management: An International Comparison. New York: Oxford University Press. Gourevitch, P. & J. Shinn (2005). Political Power and Corporate Control: The New Global Politics of Corporate Governance. Princeton: Princeton University Press. Gugler, K. (ed.) (2001). Corporate governance and economic performance. Oxford: Oxford University Press. Hardesty, D. E. (2002). Corporate governance and accounting under the Sarbanes-Oxley Act of 2002: a guide for accountants, executives, lawyers and securities analysts. New York:

-- 9 -Warren, Gorham & Lamont. Harvard Business Review on Corporate Governance (2000). Cambridge: Harvard Business Review Paperback Series. Heemskerk, E. et al. (2001). From stakeholders to shareholders? Corporate governance networks in the Netherlands 1976-1996. Amsterdam School for Social Science Research. Heinrich, R. P. (2002). Complementarities in corporate governance. Berlin: Springer. Hopt, K.J., Hideki, K.& H. Baum (2005). Corporate Governance in Context: Corporations, States, and Markets in Europe, Japan, and the U.S. Oxford: Oxford University Press. Hopt K. & Wymeersch E. (2007). European Company and Financial Law - Texts and Leading Cases Fourth Edition. Oxford : Oxford University Press Jensen, M.C. (2000). A theory of the firm. Governance, residual claims, and organizational forms. Cambridge: Harvard University Press. John, K. & S. Kedia (2003). Institutions, markets and growth: A theory of comparative corporate governance. Boston: Harvard University Press. Kaen, F. R. (2003). A blueprint for corporate governance: strategy, accountability, and the preservation of shareholder value. New York: AMACOM. Keasey, K. & M. Wright (1997). Corporate governance: responsibilities, risks, and remuneration. Chichester: Wiley. Keasey, K., Thompson, S. & M. Wright (ed.) (1999). Corporate governance. Cheltenham: Edward Elgar. Kendall, N. (1998). Real-world corporate governance: a program for profit-enhancing stewardship. London: Pitman Publishers. Kim, K. (2007). Corporate governance. London: Pearson Education. Kim, K. & Nofsinger (2007). Corporate Governance. Pearson Prentice Hall, 2nd Edition Kirchmaier, T., Owen, G. & J. Grant (2005). Corporate Governance in the US and Europe: Where Are We Now? New York: Palgrave Macmillan. Koke, J. (2002). Corporate governance in Germany: an empirical investigation. Heidelberg: Physica. Lazonick, W. & M. O'Sullivan (eds.) (2002). Corporate governance and sustainable prosperity. New York: Palgrave. Learmount, S. (2002). Corporate governance: what can be learned from Japan? Oxford: Oxford University Press. Lipman, F.D. & Lipman, L. K. (2006). Corporate Governance Best Practices: Strategies for Public, Private, and Not-for-Profit Organizations. New Jersey : John Wiley & Sons Lowry, J. & Dignam, A.J. (2006), Company Law. Oxford: Oxford University Press. Macey J. (2008). Corporate Governance:Promises Kept, Promises Broken. University Presses of California, Columbia and Princeton Mallin, C. (2004). Corporate governance. Oxford: Oxford University Press. McCahery, J., Raaijmakers,T. & E. Vermeulen (2004). The Governance of Close Corporations and Partnerships. Oxford: Oxford University Press. McCahery J. & Vermeulen E. (2008). Corporate Governance of Non Listed Companies. Oxford : Oxford University Press McGregor, L. (2002). The human face of corporate governance. New York: Palgrave. McIntosh, M., Leipziger, D., Jones, K. & G. Coleman (1998). Corporate citizenship. Successful strategies for responsible companies. London: Financial Times Publishing. Monks, R. & N. Minow (2008). Corporate Governance. London: Blackwell. 4th Edition

-- 10 -Morck, R.K. (2005). A History of Corporate Governance around the World: Family Business Groups to Professional Managers. Chicago: University of Chicago Press. Neubauer, F.-F. (1998). The family business: its governance for sustainability. New York: Routledge. Newquist, S., Russell, M. & J. Bogle (2003). Putting Investors First: Real Solutions for Better Corporate Governance. New York: Bloomberg Press. O'Brien, W. J. (1998). The soul of corporate leadership: guidelines for values-centered governance. Waltham: Pegasus Communications. OBrien, J. (ed.) (2005). Governing the Corporation. Regulation and Corporate Governance in an Age of Scandal and Global Markets. West Sussex: John Wiley. OECD (2004). Principles of Corporate Governance. Paris: OECD. OECD (2005). OECD Guidelines on Corporate Governance of State-owned Enterprises. Paris: OECD Osano, H. & T. Tachibanaki (2001). Banking, capital markets, and corporate governance. New York : Palgrave. Parkinson, J., Gamble, A. & G. Kelly (eds.) (2000). The political economy of the company. Oxford, Portland: Hart Publishers. Patterson, D. J. (2000). The link between corporate governance and performance: year 2000 update. New York: Conference Board. Post, J. E. (2002). Redefining the corporation: stakeholder management and organizational wealth. Stanford: Stanford Business Books. Rajan, R. (2000). The governance of the new enterprise. Cambridge: National Bureau of Economic Research. Roe, M. J. (2003). Political determinants of corporate governance: political context, corporate impact. Oxford: Oxford University Press. Rubach, M. J. (1999). Institutional shareholder activism: the changing face of corporate ownership. New York: Garland. Salmon, W.J., et al. (2000). Harvard Business Review on Corporate Governance. Cambridge: Harvard Business School Press. Samuel, C. (1996). Stock market and investment: the governance role of the market. Washington, D.C.: World Bank. Shleifer, A. (1996). A survey of corporate governance. Cambridge: National Bureau of Economic Research. Sifonis, J. G. (1996). Corporation on a tightrope: balancing leadership, governance, and technology in an age of complexity. Oxford: Oxford University Press. Solomon, J. (2007). Corporate governance and accountability. New York: John Wiley. Spira, L. F. (2002). The audit committee: performing corporate governance. Boston: Kluwer Academic Publishers. Steinberg, R. M. (2000). Corporate governance and the board what works best. Altamonte Springs: Institute of Internal Auditors Research Foundation. Sternberg, E. (1998). Corporate governance: accountability in the marketplace. London: Institute of Economic Affairs. Sutton, B. (ed.) (1993). The Legitimate corporation: essential readings in business ethics and corporate governance. Cambridge: Blackwell Business. Svendson, A. (1998). The stakeholder strategy. San Francisco: Barrett-Koeler Publishers. Teall, J. (2006). Governance and the market for corporate control. London: Routledge.

-- 11 -Tenev, S. (2002). Corporate governance and enterprise reform in China: building the institutions of modern markets. Washington, D.C.: World Bank. Tricker, R.I. (ed.) (2000). Corporate governance. Aldershot, Brookfield: Ashgate. Vives, X. (2000). Corporate governance: theoretical and empirical perspectives. Cambridge: Cambridge University Press. Wearing, R. (2005). Cases in corporate governance. London: Sage. Williamson, O. E. (1996). The mechanisms of governance. Oxford: Oxford University Press. Whincop, M.J. (2005). Corporate Governance in Government Corporations. Aldershot: Ashgate Publishing. Young, M. R. (ed.) (2002). Accounting irregularities and financial fraud: a corporate governance guide. New York: Aspen Law & Business. Zhuang, J., David, E. & M. Capulong (2001).Corporate Governance and Finance in East Asia. A Study of Indonesia, Republic of Korea, Malaysia, Philippines and Thailand. Asian Development Bank. Articles, working papers Aggarwal, R., et al. (2007). Do US firms have best corporate governance? A cross-country examination of the relation between corporate governance and shareholder wealth. Finance Working Paper No. 145. www.ecgi.org/wp Aggarwal, R., Jay Choi, J. & Dow, S. (2008). Probing corporate governance globally: Impacts of business systems and beyond. International Finance Review, Volume 9, 2008, Pages 3-31 Aguilera, R.V. & G. Jackson (2003). The cross-national diversity of corporate governance: dimensions and determinants. Academy of Management Review, Volume 28, Issue 3, pp. 447465. Aguilera, R.V., Williams, C.A., Conley, J. M. & D.E. Rupp (2006). Corporate Governance and Social Responsibility: a comparative analysis of the UK and the US. Corporate Governance: An International Review, Volume 14, Issue 3, pp. 147. Alistair Howard (2006). UK corporate governance: To what end a new regulatory state? West European Politics , Volume 29, Number 3, pp. 410-432. Arnold B., & P. de Lange P. (2004). Enron: An examination of agency problems. Critical Perspectives on Accounting, Volume 15, Issue 6-7, pp. 751-765. Ashbauge-Skaife, H., Collins, D., & R. LaFond (2006). The effects of corporate governance on firmscredit ratings. Journal of Accounting and Economics, Vol.42, Ussues 1-2, pp.203-243. Bebchuk, L.A. & M.J. Roe (1999). A Theory of Path Dependence in Corporate Governance and Ownership. Columbia Law School: The Center for Law and Economic Studies, Working Paper No. 131. Bebchuk, L.A. (2005). What Corporate-Governance Reforms are Still Necessary? Optimize Magazine, Issue 42. Berger, A. N., Clarke, G.R.G., Cull, R., Klapper, L. & G. F. Udell (2005). Corporate governance and bank performance: A joint analysis of the static, selection, and dynamic effects of domestic, foreign, and state ownership. Journal of Banking and Finance, Volume 29, pp. 2179-2221. Bhimani A. (2009). Risk management, corporate governance and management accounting: Emerging interdependencies, Management Accounting Research, In Press, Corrected Proof

-- 12 -Bonn, I. & J. Fisher (2005). Corporate Governance and Business Ethics: insights from the strategic planning experience. Corporate Governance, Volume 13, Number 6, pp. 730-738. Boubakri, N., Cosset, J.-C., & O. Guedhami (2005). Postprivatization corporate governance: the role of ownership structure and investor protection, Journal of Financial Economics, Vol.76, Issue 2, pp.369-399. Branston, R., Cowling, K. & R. Sugden (2006). Corporate Governance and the Public Interest. International Review of Applied Economics, Volume 20, Number 02, pp. 189 212. Brecht, M. (1999). European corporate governance: trading off liquidity against control. European Economic Review, Vol.43, Issues 4-6, pp.1071-1083. Bushman, R. et al. (2004). Financial accounting information, organizational complexity and corporate governance systems. Journal of Accounting and Economics, Vol.37, Issue 2, pp.167-201. Cannella, A.A., Daily, C.M. & D.R. Dalton D.R. (2003). Corporate governance: Decades of dialogue and data. Academy of Management Review, Volume 28, Issue 3, pp. 371-382. Cheffins, B.R (2000). Does law matter? The separation of ownership and control in the United Kingdom. Working Paper No. 172, ESRC Centre for Business Research, University of Cambridge. Chhaochharia, V. & Y. Grinstein (2007). Corporate governance and firm value. The impact of the 2002 governance rules. The Journal of Finance, Vol.62, No.4, pp.1789-1825. Clarke, D.C. (2003). Corporate governance in China: an overview. China Economic Review, Volume 14, Issue 4, pp. 494-507. Claessens, S. (2006). Corporate Governance and Development. The World Bank Research Observer , Volume 21 (1), pp. 91-122. Coffee, J. (2005). A Theory of Corporate Scandals: Why the USA and Europe Differ. Oxford Review of Economic Policy, Volume 21, No. 2, pp. 198-211. Cohen J., Wright A.M. & Krishnamoorthy G. (2002). Corporate Governance and the Audit Process. Contemporary Accounting Research, Volume 19, Issue 4, pp. 573-594. Core, J.E., Guay, W.R. & T.O. Rusticus (2006). Does Weak Governance Cause Weak Stock Returns? An Examination of Firm Operating Performance and Investors' Expectations. The Journal of Finance, Volume 61, Issue 2, pp.655. Cyert R.M., Kang S.-H. & P. Kumar P. (2002). Corporate governance, takeovers, and topmanagement compensation: theory and evidence. Management Science, Volume 48, Issue 4, pp. 453-469. Daily C.M., McDougall P.P., Covin J.G. & D.R. Dalton D.R. (2002). Governance and strategic leadership in entrepreneurial firms. Journal of Management, Volume 28, Issue 3, pp. 387-412. Davis, E.P. (2002). Institutional investors, corporate governance and the performance of the corporate sector, Economic Systems, Vol.26, Issue 3, pp.203-229. Defond, M.L. & M. Hung M. (2004). Investor protection and corporate governance: evidence from worldwide CEO turnover. Journal of Accounting Research, Volume 42, Issue 2, pp. 269-312. Denis D.K. & J.J. McConnell (2003). International corporate governance. Journal of Financial and Quantitative Analysis, Volume 38, Issue 1, pp. 1-36. Doidge, C., A. Karolyi, & R. Stulz (2007). Why Do Countries Matter So Much for Corporate Governance? Journal of Financial Economics, Vol. 86, Issue 1, pp.1-39. Dyck, A. (2000). Privatization and Corporate Governance: Principles, Evidence and Future Challenges. World Bank Research Observer, 16 (1), pp. 59-84.

-- 13 -Eng, L. & Y. Mak (2003). Corporate governance and voluntary disclosure. Journal of Accounting and Public Policy, Vol.22, Issue 4, pp.325-345. Engelen E. (2002). Corporate governance, property and democracy: a conceptual critique of shareholder ideology. Economy and Society, Volume 31, Issue 3, pp. 391-413. Enriques, L. (2005), Bad Apples, Bad Oranges: A Comment From Old Europe on Post-Enron Corporate Governance Reforms. Wake Forest Law Review, Volume 38, pp.911-934. Faccio, M. & L.H.P. Lang (2002). The ultimate ownership of Western European corporations. Journal of Financial Economics, Volume 65, Issue 3, pp. 365-395. Franks, J., Mayer, C. & S. Rossi (2003). The Origination and Evolution of Ownership and Control. Finance Working Paper No. 09/2003, European Corporate Governance Institute, 40 pages. Fulghieri, P. & M. J. Suominen (2005). Does bad corporate governance lead to too little competition? Corporate governance, capital structure and industry concentration. ECGI Working Paper No. 74/2005. Gillan, S. & L. Starks (2000). Corporate governance proposals and shareholder activism: the role of institutional investors. Journal of Financial Economics, Vol. 57, Issue 2, pp.275-305. Goergen, M. Renneboog, L. (2008). Contractual corporate governance. Journal of Corporate Finance. Volume 14, Issue 3, June 2008, Pages 166-182 Gomez, P. & K. Harry (2005). Democracy and the Evolution of Corporate Governance. Corporate Governance, Volume 13, Number 6, pp. 739-752. Goyer, M. (2006). Varieties of Institutional Investors and National Models of Capitalism: The Transformation of Corporate Governance in France and Germany. Politics Society, Volume 34, Issue 3, pp. 399 - 430. Hillier, D. & P. McColgan (2006). An Analysis of Changes in Board Structure during Corporate Governance Reforms. European Financial Management, Volume 12, Issue 4, pp. 575-607. Ho, S. & K.S. Wong (2001). A study of the relationship between corporate governance structures and the extent of voluntary disclosure. Journal of International Accounting, Auditing, and Taxation, Vol. 10, Issue 2, pp.139-156. Hpner, M. (2005). What connects industrial relations and corporate governance? Explaining institutional complementarity. Socio-Economic Review, Volume 3, Number 2, pp. 331-358. Jackson, G. (2005). Stakeholders under Pressure: Corporate Governance and Labour Management in Germany and Japan. Corporate Governance: An International Review, Volume 13, Issue 3, pp. 419-428. Jensen, M. C. & J. B. Warner (1988). The distribution of power among corporate managers and directors. Journal of Financial Economics, 20, pp. 3-24. Jiang, W. Lee, P. & Anandarajan, A. (2008). The association between corporate governance and earnings quality: Further evidence using the GOV-Score. Advances in Accounting, Volume 24, Issue 2 Joerg, P., Loderer, C., Roth, L. & U. Waelchli (2005). The Purpose of the Corporation: Shareholder-Value Maximization? European Corporate Governance Institute, ECGI Finance Working Paper No. 95/2005 Judge, W. & I. Naoumova (2004). Corporate Governance in Russia: What Model will it follow? Corporate Governance: An International Review, volume 12, pp. 302-313. Khanna,T., Kogan, J. & K. Palepu (2006). Globalization and Similarities in Corporate Governance: A Cross-Country Analysis. Review of Economics and Statistics, Volume 88, Issue 1, pp. 69-90.

-- 14 -Klapper, L.F. & I. Love ( 2004). Corporate Governance, Investor Protection and Performance in Emerging Markets. Journal of Corporate Finance, volume 10, pp. 703-728. Klein A. (2002). Audit committee, board of director characteristics, and earnings management. Journal of Accounting and Economics, Volume 33, Issue 3, pp. 375-400. Klein, P., Shapiro, D. & J. Young (2005). Corporate Governance, Family Ownership and Firm Value: the Canadian evidence. Corporate Governance, Volume 13, Number 6, pp. 769-784. Konzelmann S.J., Deakin S. & S.J. Konzelmann (2004). Learning from Enron. Corporate Governance, Volume 12, Issue 2, pp. 134-142. Leech, D. (2003). Shareholder voting Power and Corporate Governance: A Study of Large British Companies. Corporate Governance, Volume 11, Number 2, April, 33-54. Leuz C., Nanda D. & P.D. Wysocki (2003). Earnings management and investor protection: an international comparison. Journal of Financial Economics, Volume 69, Issue 3, pp. 505-527. Lin, Ying-Fen (2005). Corporate Governance, Leadership Structure and CEO Compensation: evidence from Taiwan. Corporate Governance, Volume 13, Number 6, pp. 824-835. Low, C. (2006) A framework for the governance of social enterprise. International Journal of Social Economics, Volume 33, Issue 5/6, pp. 376 385. Maher, M. & T. Andersson (1999). Corporate governance: effects on firm performance and economic growth. Paris: OECD Working Papers. Mayer, C. (2002). Financing the new economy: financial institutions and corporate governance. Information Economics and Policy, Vol.14, Issue 2, pp.311-326. McCarthy D. & S.M. Puffer (2002). Corporate governance in Russia: Towards a European, US, or Russian model? European Management Journal, Volume 20, Issue 6, pp. 630-640. Melis, A. (2004). Corporate Governance Failures. To What Extent is Parmalat a particularly Italian Case? Corporate Governance: An International Review, Volume 13, No. 4, pp. 478488. Melis, A (2004). Financial reporting, corporate communication and governance. Corporate Ownership & Control, Volume 1, Issue 2. Miozzo, M. & P. Dewick (2002). Building competitive advantage: Innovation and corporate governance in European construction. Research Policy, Volume 31, Issue 6, pp. 989-1008. Morck, R., Wolfenzon, D. & B. Yeung (2006). Corporate Governance, Economic Entrenchment, and Growth. Journal of Economic Literature, Volume 43, Issue3, pp. 655-720. Morey, M., Gottesman, A., Baker, E. & Godridge, B. (2009). Does better corporate governance result in higher valuations in emerging markets? Another examination using a new data set. Journal of Banking & Finance, Volume 33, Issue 2, pp. 254-262 Nelson, T. (2003). The persistence of founder influence: Management, ownership, and performance effects at initial public offering. Strategic Management Journal, Volume 24, Issue 8, pp. 707-724. Netter J., Poulsen A. & Stegemoller M. (2009). The rise of corporate governance in corporate control research. Journal of Corporate Finance, Volume 15, Issue 1, pp. 1-9 Pagano, M. & P. Volpin (2006). The Political Economy of Corporate Governance. American Economic Review, Volume 95, Issue 4, pp. 1005-1030. Paredes,T. (2004). A Systems Approach to Corporate Governance Reform: Why Importing US Corporate Law Isn't the Answer. Washington U. School of Law, Working Paper No. 04-0201. Available at http://papers.ssrn.com/paper.taf?abstract_id=519264 Paterson, J. (2001). Corporate governance, the limits of rationality and proceduralisation. Working Paper No. 198, ESRC Centre for Business Research, University of Cambridge.

-- 15 -Pinto, Arthur R. (2005). Globalization and the Study of Comparative Corporate Governance. Wisconsin International Law Journal, Volume 23, Number 477 Puffer, S.M. & D.J. McCarthy (2003). The emergence of corporate governance in Russia. Journal of World Business, Volume 38, Issue 4, pp. 284-298. Qiang, Q. (2003). Corporate governance and state-owned shares in China listed companies. Journal of Asian Economics, Vol. 14, No.5, pp.771-783. Qiao Liu (2006). Corporate Governance in China: Current Practices, Economic Effects and Institutional Determinants. CESifo Economic Studies, Volume 52, Issue2, pp. 415-453. Reberioux, A. (2002). European style of corporate governance at the crossroads: The role of worker involvement. Journal of Common Market Studies, Volume 40, Issue 1, pp. 111-134. Rossouw, G. J. (2005). Business Ethics and Corporate Governance: A Global Survey Business & Society, Volume 44, Number1, pp. 32-39. Schleifer, A. & R.W. Vishny (1997). A Survey of Corporate Governance. Journal of Finance, LII (2), June, pp. 737-783. Sonnenfeld, J.A. (2002). What makes great boards great. Harvard Business Review, Volume 80, Issue 9, pp. 106-113, 126. Toms, S. &. M. Wright (2002). Corporate governance, strategy and structure in British business history: 1950-2000. Business History, Volume 44, Issue 3, pp. 91-124. Tuschke, A. & G. Sanders (2003). Antecedents and consequences of corporate governance reform: The case of Germany. Strategic Management Journal, Volume 24, Issue 7, pp. 631649. Verstegen, R.L. (2005). Corporate Governance and Business Ethics in North America: The State of the Art. Business & Society , Volume 44, Number 1, pp.40-73. Wieland, J. (2005). Corporate Governance, Values Management, and Standards: A European Perspective. Business & Society, Volume 44, Number 1 , pp. 74-93. Major academic actors

Academy of Corporate Governance (India) Berlin Center of Corporate Governance (BCCG) http://www.bccg.tu-berlin.de Center for Corporate Governance (John L. Weinberg Center for Corporate Governance, Lerner College of Business & Economics, University of Delaware) Center for Corporate Governance (Tuck Achool of Business at Dartmouth) Centre for Corporate Governance Research, University of Birmingham, UK Centre for International Corporate Governance (Nottingham Business School, UK) Corporate Governance Center (Kennesaw State University, USA) Corporate Governance Initiative (Harvard) Corporate Governance Institute (San Diego State University) European Centre for Governance and Risk at Bournemouth University, UK European Corporate Governance Institute (ECGI) Global Corporate Governance Forum (World Bank) Global Corporate Governance Research Center (The Conference Board) Institute of Corporate Law and Corporate Governance (Russia) Institute for International Corporate Governance and Accountability at the George Washington University Law School International Institute for Corporate Governance (Yale University)

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John M. Olin Center for Law, Economics, and Business (Program on Corporate Governance, Harvard) The Samuel and Ronnie Heyman Center on Corporate Governance, Yeshiva University

National Corporate Governance Initiatives

Australia: Bosch Report Canada: Dey Report France: Vienot Report German: Japan: Corporate Governance Forum South Africa: King Report Switzerland: Swiss Code of Best Practices UK: Cadbury Report, Greenbury Report, Hampel Report, Higgs Review USA: Sarbanes-Oxley Act, Business Roundtable Statement on Corporate Governance

Ratings on Corporate Governance

CoreRatings, European provider of independent ratings reports on corporate governance, the environmental impact, employment practices and impact on the societies. CRISIL (India) Governance and Value Creation Ratings reviews management capabilities, transparency, influence of major stakeholders, board composition and effectiveness. Deminor Rating helps to bridge the corporate governance expectation gap between investors and listed companies. First European corporate governance rating agency. GovernanceMetrics International. Bills itself as the "worlds first global corporate governance ratings agency." Weighs more than 600 variables, including environmental, workplace safety, and earnings management. ICRA Limited. Provides a Corporate Governance Ratings (CGR) service for the Indian Market. IRRC: announced plans for a strategic partnership with TrueCourse, Inc. to provide an objective corporate governance product that provides value-added analysis based on clearly identified factors considered relevant to the "health" of a corporation. ISS: Corporate Governance Quotient. ISS calculates CGQs for 6,000 companies. To generate a CGQ, ISS analysts gather data on more than 61 criteria in the following categories: board, charter/bylaws, compensation, state of incorporation, executive and director compensation, qualitative factors, stock ownership, and director education. Launched in June 2002, information is primarily gathered from SEC filings. Moody's Investors Service is overhauling the corporate governance assessment in its existing ratings. The firm hired Kenneth Bertsch to serve as director of corporate governance, a position he held at TIAA-CREF. Standard & Poor's: Governance Services offers a range of products and services to evaluate the corporate governance standards of individual companies around the world. The Corporate Governance Score assesses companies' corporate governance performance

-- 17 -for investors. The Corporate Governance Evaluation Service confidentially diagnoses corporate governance for companies. The Corporate Governance Customized Research tailors research for investors, companies, regulators, or other organizations.

Useful websites

Berlin Center of Corporate Governance (BCCG) http://www.bccg.tu-berlin.de Business Roundtable-Corporate Governance http://www.brtable.org/issue.cfm/2/0/0/12 Cato Institute-Corporate Governance http://www.cato.org/current/corporate-governance/ Centre for International Private Entreprise http://www.cipe.org/ CFO Web-Corporate Governance http://m1.mny.co.za/cfcgvn.nsf/Current?OpenView Comparative Study of Corporate Governance Codes Relevant to the European Union and Its Member States http://europa.eu.int/comm/internal_market/en/company/company/news/corp-govcodesrpt_en.htm Corporate Governance http://www.corpgov.net/ Corporate Governance http://www.corpgov.net/news/news.html Corporate Governance Committee http://www.corporategovernancecommittee.be/ European Corporate Governance Institute http://www.ecgi.org/ European Corporate Governance Institute http://www.ecgi.org/codes/menu_international.htm Global Corporate Governance Forum http://www.gcgf.org/ International Chamber of Commerce http://www.iccwbo.org/index_corpgov.asp International Corporate Governance Network http://www.icgn.org/ OECD/OCDE http://www.oecd.org OECD - Corporate governance : http://www.oecd.org/topic/0,3373,en_2649_37439_1_1_1_1_37439,00.html SIX SwissExchange http://www.six-swissexchange.com/admission/being_public/governance_fr.html The Corporate Library http://www.thecorporatelibrary.com/ The Encyclopedia About Corporate Governance http://www.encycogov.com/ Weinberg Center for Corporate Governance at the University of Delaware, USA http://www.be.udel.edu/ccg/purpose.htm World Bank http://www.worldbank.org/html/fpd/privatesector/cg/ World Bank Institute http://www.worldbank.org/wbi/governance/ World Council for Corporate Governance http://www.wcfcg.net/