29.2: Factors Affecting Corporate Governance

Question 1

What is Corporate governance?

Answer 1

The system of internal checks, balances, and incentives that exists to manage conflicting interests among a company’s stakeholders.

Question 2

What is Stakeholder management?

Answer 2

The identification, prioritization, and understanding of the interests of stakeholder groups and managing the company’s relationships with these groups.

Question 3

What is Proxy voting?

Answer 3

A process that enables shareholders who are unable to attend a meeting to authorize another individual to vote on their behalf.

Question 4

What is Cumulative voting?

Answer 4

A voting process whereby shareholders can accumulate and vote all their shares for a single candidate in an election.

**As opposed to having to allocate their voting rights evenly among all candidates.

Question 5

Main ways of Corporate Takeovers are?

Answer 5

Proxy contest;
Tender offers;
Hostile takeover.

Question 6

What is Proxy contest?

Answer 6

Corporate takeover mechanism in which shareholders are persuaded to vote for a group seeking a controlling position on a company’s board of directors.

Question 7

What are the Tender offers?

Answer 7

A public offer whereby the acquirer invites target shareholders to submit (“tender”) their shares in return for the proposed payment.

Question 8

What is a Hostile takeover?

Answer 8

An attempt by one entity to acquire a company without the consent of the company’s management.