Corporate Governance

by Monks, Robert A. G.; Minow, Nell

• ISBN13: 9780631222644
• ISBN10: 0631222642
• Edition: 2nd
• Format: Paperback
• Copyright: 2001-08-01
• Publisher: John Wiley & Sons Inc

Summary

This book provides a comprehensive look at the history, the myth, the reality, and the future of corporate governance issues. Provides a comprehensive look at the history, the myth, the reality, and the future of corporate governance issues. Second edition has been extensively re-written and updated. Includes numerous case studies and supplementary online material. For supplemental resources including full appendices visit www.blackwellpublishers.co.uk/monks

Author Biography

Robert A. G. Monks and Nell Minow are founders of The Corporate Library

Table of Contents

Cases in point	xii
Foreword	xiv
B. Minoru Makihara
Acknowledgments	xvi
Introduction	1	(4)
What Is a Corporation?	5	(75)
Definitions	5	(1)
Evolution of the Corporate Structure	6	(5)
The Purpose of a Corporation	11	(2)
Human satisfaction	11	(1)
Social structure	11	(1)
Efficiency and efficacy	12	(1)
Ubiquity and flexibility	12	(1)
Identity	13	(1)
The Corporation as a ``Person''	13	(1)
The Corporation as a ``Moral Person''	13	(3)
The Corporation in Society	16	(2)
The marketplace	17	(1)
Future Directions	18	(1)
Corporate Power and Corporate Performance	18	(6)
Corporate Crime: ``Within the Limits of the Law''	24	(5)
Probation of corporations	25	(4)
Corporations and Government: Co-opting the Market	29	(5)
Measuring Performance	34	(2)
Balancing Interests	36	(4)
Good and Bad Corporations?	40	(4)
Equilibrium: The Cadbury Paradigm	44	(2)
Measuring Value Enhancement	46	(26)
GAAP	46	(5)
Market value	51	(1)
Earnings per share	52	(1)
EVA®: economic value added	53	(1)
Human capital: ``It's not what you own but what you know''	54	(1)
Knowledge capital	55	(1)
The value of cash	55	(5)
Corporate ``externalities''	60	(12)
Non-economic Considerations in Corporate Management	72	(8)
Shareholders: Ownership	80	(84)
Definitions	80	(2)
Early Concepts of Ownership	82	(1)
Early Concepts of the Corporation	83	(1)
A Dual Heritage: Individual and Corporate ``Rights''	84	(1)
The Re-invention of the Corporation: Eastern Europe in the 1990s	85	(1)
The Evolution of the American Corporation	86	(3)
The Essential Elements of the Corporate Structure	89	(3)
The Separation of Ownership and Control, Part 1: Berle and Means	92	(4)
Fractionated Ownership	96	(3)
The Separation of Ownership and Control, Part 2: The Takeover Era	99	(3)
Waking the Sleeping Giant	102	(5)
A Framework for Participation	107	(1)
Ownership and Responsibility	107	(2)
No innocent shareholder	107	(2)
To Sell or Not to Sell: The Prisoner's Dilemma	109	(1)
Who the Institutional Investors Are	110	(5)
Bank trusts	111	(1)
Mutual funds	112	(1)
Insurance companies	113	(1)
Universities and foundations	113	(1)
Pension plans	114	(1)
The Biggest Pool of Money in the World	115	(8)
Pension plans as investors	121	(1)
Pension plans as owners	121	(2)
Public Pension Funds	123	(7)
Economically targeted investments	127	(1)
Federal Employee Retirement System	128	(2)
TIAA-CREF	130	(1)
Private Pension Funds	131	(4)
The Sleeping Giant Awakens: Shareholder Proxy Proposals on Governance Issues	135	(6)
Focus on the Board	141	(1)
SEC's Proxy Reform	141	(4)
Investing in Activism	145	(1)
New Models and New Paradigms	146	(5)
The ``Ideal Owner''	151	(2)
Pension Funds as ``Ideal Owners''	153	(1)
Is the ``Ideal Owner'' Enough?	154	(10)
Directors: Monitoring	164	(51)
A Brief History of Anglo-American Boards	165	(1)
Today's Typical Board	166	(2)
Size	166	(1)
Inside/Outside mix	166	(1)
Diversity	166	(1)
Meeting frequency	167	(1)
Ownership	167	(1)
Board Duties: The Legal Framework	168	(3)
The Board-Management Relationship	171	(1)
Information Flow	171	(4)
The CEO-Chairman	175	(1)
Catch 22: The Ex-CEO as Director	176	(2)
Director Nomination	178	(7)
Director Compensation	185	(4)
Interlocks	187	(1)
Time and money	187	(2)
The Director's Role in Crisis	189	(1)
``Independent'' Outside Directors	190	(4)
Director Election	194	(2)
Staggered boards	194	(1)
Confidential voting	195	(1)
Impact of the Takeover Era on the Role of the Board	196	(1)
The Fiduciary Standard and the Delaware Factor	197	(6)
How did boards respond?	199	(1)
Greenmail	199	(1)
``Poison pills''	200	(2)
Other anti-takeover devices	202	(1)
Recommendations for the Future	203	(12)
Improving director compensation	203	(1)
Increasing the authority of independent directors	203	(1)
``A market for independent directors''	204	(1)
``Designated director''	205	(1)
``Just vote no''	205	(1)
Audit committees	206	(1)
Board evaluation	207	(1)
Executive session meetings	207	(1)
Succession planning and strategic planning	207	(1)
Lipton/Lorsch's ``Modest Proposal''	207	(2)
Making directors genuinely ``independent''	209	(1)
Involvement by shareholders	210	(5)
Management: Performance	215	(34)
Introduction	215	(1)
What Do We Want from the CEO?	216	(2)
``Dinosaurs''	218	(3)
Executive Compensation	221	(4)
Stock Options	225	(2)
Restricted Stock	227	(1)
Shareholder Concerns: Several Ways to Pay Day	227	(2)
The ``guaranteed bonus'' - the ultimate oxymoron	227	(1)
Bundled proposals	228	(1)
Deliberate obfuscation	228	(1)
The Christmas tree	228	(1)
Compensation plans that are all upside and no downside	228	(1)
Phony cuts	229	(1)
Future Directions	229	(1)
CEO Employment Contracts	230	(3)
Gross-ups	231	(1)
Cause	231	(1)
Change of control	232	(1)
Half now, half later	232	(1)
Employees: Compensation and Ownership	233	(4)
Employee Stock Ownership Plans	237	(3)
Mondragon and Symmetry: Integration of Employees, Owners, and Directors	240	(4)
Conclusion	244	(5)
International Governance	249	(49)
Corporate Governance Has Gone Global	249	(9)
The triumph of the corporation	249	(1)
The global company	250	(1)
The global investor	250	(1)
The demands of capital	250	(1)
The triumph of the code	251	(1)
Universal codes	252	(1)
An investor perspective	252	(6)
The Asian Financial Crisis, the World Bank and Governance in Emerging Markets	258	(4)
World Bank and G7 response	259	(3)
Global Corporate Governance Forum	262	(2)
The Developed World	264	(1)
Japan	264	(11)
Corporate governance in Japan: A report by Oxford Analytica	265	(8)
Corporate Governance Forum of Japan	273	(2)
Germany	275	(16)
Corporate governance in Germany: A report by Oxford Analytica	275	(7)
Signs of change	282	(1)
German governance code	283	(2)
Earthquake	285	(2)
Future perfect?	287	(4)
France	291	(4)
French ownership	291	(1)
Management and boards: Non state-owned companies	292	(1)
Vienot I and II	292	(3)
Convergence?	295	(3)
Case Studies: Corporations in Crisis	298	(140)
General Motors	299	(39)
General Motors and Pierre du Pont	299	(3)
General Motors: What Went Wrong?	302	(19)
General Motors and Ross Perot	321	(5)
General Motors after Perot: Smith and Stempel	326	(7)
General Motors: A Postscript	333	(5)
American Express	338	(12)
Time Warner	350	(12)
Sears, Roebuck & Co.	362	(11)
Diversification Strategy: The Fate of Retail	362	(9)
Sears: A Postscript	371	(2)
Armand Hammer and Occidental Petroleum	373	(4)
Polaroid	377	(11)
Polaroid's ESOP: Delaware Sits in Judgment	379	(9)
Carter Hawley Hale	388	(11)
Hostile Takeover	388	(8)
After the Restructuring	396	(3)
Eastman Kodak	399	(4)
Waste Management Corp.	403	(19)
Gold into Garbage	404	(1)
Lens and Soros	405	(4)
The Soros Effect	409	(1)
Restructuring	410	(7)
What Went Wrong?	417	(1)
How Was It Solved?	418	(1)
Waste Management: A Postscript	419	(3)
Stone & Webster	422	(13)
Stone & Webster: The Company that Built America	422	(13)
Mirror Group	435	(3)
Shareholder Activism in the UK	435	(3)
Appendix: Overview of Corporate Governance Guidelines and Codes of Best Practice in Developing and Emerging Markets	438	(9)
Holly J. Gregory
Overview	439	(1)
The Corporate Objective	440	(1)
Board Responsibilities and Job Description	441	(1)
Board Composition	442	(3)
Board Committees	445	(1)
Disclosure Issues	445	(1)
Summary	446	(1)
Index of names	447	(13)
Subject index	460