1. What is corporate governance?3
2 Corporate governance in The Netherlands4
2.2 Commission Tabaksblat4
2.3 The two tier system4
2.3.2 Board of directors4
2.3.3 The management4
2.3.5 Controllers en accountants5
3. What went wrong?7
3.2 How does corporate governance affect your investment?7
3.3 The Sarbanes-Oxley Act7
4 Applied corporate governance9
4.1 ABN Amro9
4.1.2 The Supervisory Board9
4.1.3 The Management Board9
4.1.5 Preferred shares9
4.1.6 The Sarbanes-Oxley Act9
4.2.2 The Supervisory Board9
4.2.3 The Corporate Executive Board10
4.2.5 Prefered shares10
4.2.6 Sarbanes-Oxley Act10
4.3.2 The Supervisory Board11
4.3.3 The Board of Management11
4.3.4 General Meeting of Shareholders12
4.3.5 Preference shares and the Stichting Preferente Aandelen Philips12
1. What is corporate governance?
Corporate governance is a generic term which describes the ways in which rights and responsibilities are shared between the various company stakeholders especially the management and the shareholders. Typical corporate governance measures include appointing non-executive directors, placing constraints on management power and ownership concentration, as well as ensuring proper disclosure of financial information and executive compensation.
The evolution of public ownership, in other words the shareholders of the company, has created a separation between ownership and management. Before the 20th century, many of the companies were small, family owned and run. Today many are large international conglomerates that trade publicly on one or many global exchanges.
In attempts to create a corporation where stockholders interests are looked after, many firms have implemented a two-tier corporate hierarchy. On the first tier is the board of directors. These individuals are elected by the shareholders of the company. They are a group of individuals who are elected by stockholders to establish corporate management policies and make decisions on major company issues. Every public company must have a board of directors. On the...