Corporate Governance

ECO420 Corporate Governance

  • Topics

    Topics

    For investors to be willing to provide financing, some mechanisms protecting their interests must be in place. Such mechanisms can be incentive contracts for company executives, legal protection of owner rights, ownership concentration and voting power, or membership on the corporate board. The purpose of this course is to get a thorough understanding of how these mechanisms work in theory and in practice.

  • Learning outcome

    Learning outcome

    Upon completion of the course students have

    - Knowledge:

    • a thorough understanding of how financial contracts and CEO remuneration should be designed in order to provide efficient incentives and maximize firm value.
    • a thorough understanding of how firm´s optimal governance structure depends on firm and industry characteristics.
    • knowledge of how legal protection investor rights differ across time and across countries and how these differences shape financial markets and regularities in firm financing.
    • knowledge of common investors rights and how they are used and enforced.

    - Skills

    • ability to investigate and assess strengths and weaknesses in a firm´s governance structure.
    • ability to assess how decision rights and cash flow rights of financial instruments should be bundled together.
    • ability to asses political forces behind regulation and development of financial markets
    • some experience and skills in research through research-oriented group projects that are to be presented in class (student presentations)

    - General competence

    • ability to utilise knowledge and skills from corporate governance anaysis in an independent manner

  • Required prerequisites

    Required prerequisites

    From Fall 2015 the following prerequisites will apply:

    The course builds on some analytic skills in using, understanding, developing, testing and interpreting economic models. Knowledge corresponding to one (or several) of the courses ECO400, ECO401, ECO403 or ENE420 is adequate for this. Such a course (or courses) may be taken in parallel to this course.

  • Requirements for course approval

    Requirements for course approval

    One assignment and student presentation of project.

  • Assessment

    Assessment

    4 hours written school exam.

  • Grading Scale

    Grading Scale

    A - F.

  • Computer tools

    Computer tools

    None.

  • Semester

    Semester

    Autumn. Offered Autumn 2018

  • Literature

    Literature

    Tirole (2006) The theory of corporate finance, Princeton University Press.

    A list of journal articles.

Overview

ECTS Credits
7.5
Teaching language
English
Semester
Autumn

Course responsible

Professor Trond E. Olsen, Department of Business and Management Science, and Assistant Professor Chang-Koo Chi, Department of Economics.