Corporate Governance

ECO420 Corporate Governance

  • Learning outcome

    Learning outcome

    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.

    The aim of the course is to provide students

    i) with tools to investigate and assess strengths and weaknesses in a firm´s governance structure.

    ii) with a thorough understanding of how financial contracts and CEO remuneration should be designed in order to provide efficient incentives and maximize firm value.

    iii) with tools to assess how decision rights and cash flow rights of financial instruments should be bundled together.

    iv) with an advanced understanding of how firm´s optimal governance structure depends on firm and industry characteristics.

    v) with knowledge of common investors rights and how they are used and enforced.

    vi) with 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.

    vii) with tools to asses political forces behind regulation and development of financial markets

    viii ) with some experience and skills in research through research-oriented group projects that are to be presented in class (student presentations)

     

     

  • 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

    Two assignments and student presentation of project.

  • Assessment

    Assessment

    4 hours written exam.

  • Grading Scale

    Grading Scale

    Grading scale A - F.

  • Computer tools

    Computer tools

    None.

  • Semester

    Semester

    Autumn

  • 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

Eirik G. Kristiansen og Trond E.Olsen.