Module                       : MGT 303: Fundamentals of Corporate Governance

Programme                : BBA

Credit Value              : 12

Prerequisite                : None

General Objectives:

• To gain basic knowledge on Corporate Governance Principles and purpose of good corporate governance.
• To provide knowledge on global development and best practices in the corporate world.
• To provide students with the opportunity to broaden and deepen their knowledge of concepts in corporate governance theories and practices.
• To provide students with the opportunity to examine and critically analyse the role of corporate governance in businesses and the global economy.

Learning Outcomes:

Upon successful completion of the module, student is expected to:

• Evaluate the role and nature of corporate governance
• Demonstrate the understanding of the key theoretical issues in the study of corporate governance
• Distinguish between various approaches to the subject
• Analyse the contexts, both endogenous and exogenous, that underpin and contribute to corporate governance structures locally and internationally
• Synthesize the epistemological and social scientific influences and interpretations of corporate governance issues

CONTENT

Unit- I: Evolution, Concept, Principles and development:                                             (8 Hours)

Introduction to Corporate Governance; History of Corporate Governance; Concepts of Corporate Governance and Stake Holder; Corporate Objectives and goals, Ownership pattern ; Issues in managing public limited firms ; Agency problems. Nature & Evolution of Corporate Governance: Global and National Perspectives – Global Corporate Governance models Anglo American and Relationship model (Germany, Japan and France) Claims of Various Stakeholders Why governance – Changes in eighties Cadbury Report, Hampel Report and OECD Committee Recommendations – SOX Act.

Unit- II: Corporate Governance Mechanism and Overview:                                        (6 Hours)

4 P’s of Corporate Governance: People, Purpose, Process and Performance; Wealth Creation, Management and Distribution; Disclosure in offer documents

Unit- III: Mechanism and Control:                                                                                  (8 Hours)

Internal Corporate Governance Mechanism: Board of Directors— Functional Committees of Board; Remuneration, Code of conduct, whistle blowers; External Corporate Governance: Debt Covenants, Government Regulations, competitions and external auditors;

Unit- IV: Corporate Democracy and Investors relations:                                              (8 Hours)

Corporate ownership structures, Corporate Democracy; Shareholders Democracy and Protection of Minority Interests; Role of Corporations in promoting shareholders democracy; Rights of shareholders, duties and workers as stakeholders

Unit- V: Governance Disclosures and Transparency:                                                    (8 Hours)

Concept of Disclosure, reasons and considerations in making disclosures; Transparency; Mechanisms to control managerial behaviour and to enhance transparency; scope of disclosures, forms of disclosures, problems in making adequate disclosure

Unit- VI: Financial Oversight and Audit Mechanism:                                                   (8 Hours)

Internal Audit: Reasons, scope and key considerations; Internal Control, the External Audit function, Auditor company relationship, Independence of Auditors, Establishment of Accounting Oversight Board

Unit- VII: Constraints to Effective Corporate Governance:                                         (8 Hours)

Factors responsible for obstructing effective corporate governance, Poor Board Structure and unclear Delineation of Duties, Non- disclosures and lack of transparency, lack of respect for shareholders rights, abuse of corporate opportunity, Insider trading and Interlocking Directorship.

Teaching Strategies

·         Lecture

·         Seminars

·         Group Work

·         Case studies

Assessment

·        Case Analysis and Presentations:             50 %

·        End-Semester Exam                                 50 %

                                                            Total 100 %

Essential Texts

1.  Bansal CL, Corporate Governance, (2008) Taxmann’s, New Delhi, INDIA
2. Solomons, Corporate Governance and Accountability (2007),Wiley India Pvt. Ltd. New Delhi, INDIA

References

1. Business Ethics & Corporate Governance ICMR
2. Business Ethics: Concepts and Cases Velasquez, M. G. Prentice Hall of India 2005
3. Corporate Governance Monks, R. / Minow, N. Blackwell 2008
4. Corporate Governance Banks, Eric. John Wiley
5. Cases on Business Ethics Business World
6. Corporate Governance Fernando, A C. Pearson Education 200