Basics

Question 1

Hostile takeover

Answer 1

attempt to acquire company without co’s mgt consent

Question 2

Tender offer

Answer 2

Invitation to SH to sell their interest directly to group seeking to gain control

Question 3

Poison Pill

Answer 3

Anti takeover measures. Staggered board, rights issue

Question 4

ESG

Answer 4

Becoming more quantifiable. Governance is easily identifiable. Now E&S are also becoming internalized cost rather than negative externalities

Question 5

Challenges in stakeholder theory of CG

Answer 5

complexity of balancing multiple objective, defining, measuring & balancing non-SH objective, competing globally if competitors do not face similar constraints & direct cost of adhering to higher ESG standards

Question 6

Board Structure

Answer 6

Single-tier or two tier model (Supervisory board - ID alone)

Question 7

Climate change risk

Answer 7

Physical risk (Property damage - insured against or diversified) Transition risk (stranded assets)

Question 8

Mgt vs SH interest

Answer 8

Insufficient effort (political or charitable activities, personal invts), Inappropriate risk appetite (Stock based compensation plan), Empire building (acquisition), Self-dealing (exploit firm resource for personal benefit), Entrenchment (Copying competitors to retain job)

Question 9

AGM decisions

Answer 9

BOD selection, Auditor appointment, AFS approval, say on pay non-binding vote on compensation plans, approval of equity based comp plan

Question 10

Shareholder activism

Answer 10

investor strategies to compel a co to act in desired manner.

Question 11

Audit committee

Answer 11

Solely ID & atleast one ID with a/cing or finance expertise

Question 12

Mgt compensation plan should

Answer 12

vary each year based on performance

Question 13

Customers have a

Answer 13

contractual relationship with CI