Examples of corporate governance in the following topics:
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- Corporate governance is the system by which companies are directed and controlled.
- Corporate governance is the system by which companies are directed and controlled.
- An important theme of corporate governance is the nature and extent of accountability of people in the business.
- Contemporary discussions of corporate governance tend to refer to principles raised in three documents released since 1990: The Cadbury Report (UK, 1992), the Principles of Corporate Governance (OECD, 1998 and 2004), the Sarbanes-Oxley Act of 2002 (US, 2002).
- Corporate governance deals with the conflicts of interests in a company.
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- Government corporations are revenue generating enterprises that are legally distinct from but operated by the federal government.
- A government-owned corporation, also known as a state-owned company, state enterprise, publicly owned corporation, or commercial government agency, is a legal entity created by a government to undertake commercial activities on behalf of the government.
- In some cases, government-owned corporations are considered part of the government, and are directly controlled by it.
- In the United States, there is a specific subset of government-owned corporations known as government-sponsored enterprises (GSEs).
- Lastly, the government sometimes controls government acquired corporations--corporations that were not chartered or created by the government, but which it comes to possess and operate.
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- For example, in 2007 the Chinese Investment Corporation agreed to acquire a 10% interest in the global investment bank Morgan Stanley, but it is unlikely that this would qualify the latter as a government-owned corporation.
- SOEs are often the result of corporatization, a process in which government agencies are re-organized as semi-autonomous corporate entities.
- The term government-linked company (GLC) is sometimes used to refer to private or public corporate entities in which an existing government owns a stake through a holding company.
- There are multiple ways of defining GLCs, depending on the proportion of the corporate entity a government owns.
- A quasi-governmental organization is a corporation, business or agency that is regarded by national laws and regulations as being under the guidance of the government, but also separate from the government.
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- We draw the supply and demand for two markets: government bond market and corporate bond market.
- Some investors demand fewer corporate bonds and invest more in government bonds.
- Thus, the demand for corporate bonds falls while the demand for government bonds rise because the investors consider the government bonds default-free.
- Did you notice the government bonds have a higher bond price while corporate bonds have a lower bond price?
- Hence, the difference between government and corporate interest rates would widen.
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- For instance, U.S. government securities are widely traded and are the most liquid.
- We start the analysis with the same liquidity in both the government bond and corporate bond markets in Figure 2.
- Demand function increases and shifts rightward for government bonds.
- Thus, the government bond prices rise, which reduces the interest rate for government bonds.
- On the other hand, the corporate bond prices decrease, raising the market interest rate for corporate bond.
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- Once incorporated, a corporation has artificial personhood everywhere it operates, until the corporation is dissolved.
- A multinational corporation (MNC) is a corporation that either manages production or delivers services in more than one country .
- National and local governments often compete against one another to attract MNC facilities, with the expectation of increased tax revenue, employment, and economic activity.
- Because of their size, multinationals can have a significant impact on government policy, primarily through the threat of market withdrawal.
- Confrontations between corporations and governments have occurred when governments have tried to force MNCs to make their intellectual property public.
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- Historically, corporations were created by a charter granted by government .
- Today, corporations are usually registered with the state, province, or national government, and regulated by the laws enacted by that government.
- Generally, a corporation files articles of incorporation with the government, laying out the general nature of the corporation, the amount of stock it is authorized to issue, and the names and addresses of directors.
- Once the articles are approved, the corporation's directors meet to create bylaws that govern the internal functions of the corporation, such as meeting procedures and officer positions.
- If a corporation operates outside its home state, it is often required to register with other governments as a foreign corporation, and is almost always subject to the laws of its host state pertaining to employment, crimes, contracts, civil actions, and the like.
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- A charter is a legal document from government that creates the corporation.By law, the corporation becomes an independent legal entity with rights similar to a person.A state government approves corporate charters in the United States.For example, several corporations choose the State of Delaware because the state charges the lowest fees to incorporate.
- A corporation has limited liability.Stockholders own the corporation, and they are not liable for a corporation's debt.If a corporation fails, subsequently, the stockholders only lose their investment, the amount of common stock that they had purchased.
- Stockholders do not have a mutual agency relationship, where the stockholders cannot bind a corporation to contracts.Stockholders have no say in the daily operation of the corporation even though they own the corporation.
- Corporations have two disadvantages.First, government heavily regulates corporations.Corporations file many reports with government because corporations can expand into many countries, markets, and industries.Corporations may encourage regulations because bureaucratic red tape creates barriers to entry.Thus, new companies experience troubles entering the market with complex and arduous regulations.Second, government imposes taxes twice on corporations.Corporations pay taxes from their profits.Then stockholders receive profit from the corporation as dividends, and the dividends become income to the stockholder that a government also taxes.
- Corporations can use subsidiaries to avoid regulations or avoid taxes.For instance, a parent corporation could relocate to the Bahamas or Cayman Islands.These countries are tax havens with low taxes, little regulations, and strong confidentiality laws.Consequently, corporations can shift assets and liabilities among subsidiaries to decrease their overall tax burden.At this point, we clarify some tax terminology.Tax evasion is a person or corporation owes a government for taxes, but refuses to pay it.Some activity created the tax liability, and the law requires them to pay taxes.Otherwise, government can assess fines or send the tax evaders to prison.However, corporations can use tax avoidance because they can afford to hire specialists.Tax avoidance is the managers careful plan the corporate activities and prevent the creation of tax liabilities.
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- A corporate bond is issued by a corporation seeking to raise money in order to expand its business.
- A corporate bond is issued by a corporation seeking to raise money in order to expand the business.
- (The term commercial paper is sometimes used for instruments with a shorter maturity period. ) Sometimes, corporate bond is used in reference to all bonds with the exception of those issued by governments in their own currencies.
- Subordinated debt has a lower priority than the issuer's other bonds and ranks below the liquidator, government tax authorities, and senior debt holders in the hierarchy of creditors.
- A corporate bond is issued by a corporation seeking to raise money in order to expand its business.
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- Suppose you decide to form a corporation to import and distribute shoes.
- Incorporation is the formation of a new corporation.
- The corporation may be a business, a nonprofit organization, a sports club, or a government of a new city or town.
- Some state laws are particularly corporate-friendly.
- Also, they can own shares in other corporations and receive corporate dividends 80 percent tax-free.