Chapter 10 (Corporate Governance)
Management 211 with Swim at Texas A&M University
About this deck
By: Brian Ayers
Textbook:
The Legal Environment of Business
Created: 2012-04-22
Size: 33 flashcards
Views: 286
Textbook:
The Legal Environment of BusinessCreated: 2012-04-22
Size: 33 flashcards
Views: 286
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
Dennis
Sign up (free) to study this.
acquiring company
company that attempts to take over the target company
board of directors
a group elected by the stockholders that governs over company policy
bond
form of financial security that represents a promise to repay a fixed amount at a later time
business judgment rule
rule that prevents corporate management from being liable for damages or losses to the corporation itself if actions were taken both appropriately and in good faith
corporate officers
the top executives that run a corporation
corporate governance
involves formulating, overseeing, and monitoring the processes by which a corporation is governed in order to actually run the corporation
corporate opportunity doctrine
established by case law; any opportunity that can benefit the corporation must not be taken by a corporate officer, director, or shareholder
corporate managers
the top-management team that reports to the corporate officers
derivative actions
shareholders may file derivative action on behalf of the corporation that permits the corporation to recover damages if liability can be established; shareholders must first make a formal demand upon the directors that the corporation pursue remedies available to it
duty of due care and diligence
established duty of officers and directors to act in good faith and exercise a level of care that an ordinary prudent person would use
friendly offer
a tender offer that a board of directors of the target company endorses
inside directors
directors already employed by the company
inside information
any information that is not yet publicly available
insider trading
an obligation of officers and directors not to profit from trading in company's stock based on information acquired as agents of the shareholders
institutional investor
a large, professionally managed provider of capital, such as a pension fund, insurance company, or mutual fund
know thy customer rule
requires brokers to ascertain whether particular investments are appropriate for a client before recommending it to them
market for corporate control
external governance mechanism consisting of a set of potential owners who are seeking to acquire undervalued firms and earn above average returns on their investments, a process which becomes active when a firm's internal controls fail
outside directors
directors who are not executives of the corporation
principal-agent problem
the problem created by the possibility of the agent acting on their own behalf than for the betterment of the principal
proxy
an agent , substitute; a written permission allowing one person to act in another's place
proxy contests
a means for outsiders to take control of a corporation by convincing shareholders to vote for their slate of directors
registration statement
a statement filed with the SEC that discloses all material information concerning the corporation making a public offering
Securities and Exchange Commission (SEC)
federal agency with the responsibility of regulating the required disclosure of specified information via proxy statements
security
a financial asset, such as a stock or bond, that can be bought and sold in a financial market
separation of ownership and control
because of fractured ownership, no one shareholder finds it in his or her self-interest to monitor actively the performance of the company
Shareholder
a person who owns one or more share of stock in a company/corporation
Shareholder Meetings
annual meetings, election of directors, held at the registered office; notice must be no less than ten days; need quorum (typically a majority of shares)
shareholder proposals
right to make proposals at shareholders' meetings; proposals may be excluded by managers for various reasons
short-swing profits
a capital gain made by buying and selling the company stock withing any 6 month period (the gain must be returned to the company's treasury)
stock
an ownership share in a corporation.
target company
entity whose assets are being sold, or whose stock is being sold; a company that has been chosen as attractive for takeover by a potential acquirer.
tender offer
offer made by an acquiring company to purchase the shares at a certain price as a means of taking over
unfriendly offer
a tender offer that is not endorsed by the target company
About this deck
By: Brian Ayers
Textbook: The Legal Environment of Business
Created: 2012-04-22
Size: 33 flashcards
Views: 286
Textbook:
The Legal Environment of BusinessCreated: 2012-04-22
Size: 33 flashcards
Views: 286
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
Dennis