Fnce 4826 Sanjai Bhagat Seminar in Corporate Governance



Download 0.68 Mb.
Page1/7
Date02.02.2019
Size0.68 Mb.
#80043
  1   2   3   4   5   6   7
University of Colorado-Boulder

Leeds School of Business


FNCE 4826 Sanjai Bhagat

Seminar in Corporate Governance Office: KOBL S431

Spring 2016

KOBL S125

M 3:30 pm - 6:15 pm



sanjai.bhagat@colorado.edu

Office Hours: TH 1 pm – 3pm


I. Course Objective
Corporate governance consists of the set of corporate policies that ensures outside investors a fair return on their investment. The objective of the course is to provide the student with a state-of-the-art understanding of corporate governance as it relates to

  • Corporate control

  • Corporate performance

  • Board structure and effectiveness

  • Executive and board compensation

  • Entrepreneurship and private equity

  • Corporate social responsibility

II. Course Materials and Prerequisite

Course materials consist of scholarly journal articles and working papers. These and lecture notes/overheads and class announcements can be accessed from my home-page:



http://leeds-faculty.colorado.edu/bhagat
The recommended textbook for this course is Corporate Governance Matters by David Larcker and Brian Tayan, FT Press, 2011.
Articles from the Wall Street Journal will be used to motivate some of the class discussion.

www.wsj.com/studentoffer www.wsj.com/quarter

  This is a Finance elective. FNCE 3010 is a prerequisite.
III. Course Outline and Readings
A. Introduction
Corporate Governance Matters Chapter 1. IntroductionAgencyTheoryApplication

IntroductionCorporateGovernance




B. Corporate Control: Mergers and Takeovers
Corporate Governance Matters Chapter 11.
Andrade, M. Mitchell, and E. Stafford. "New Evidence and Perspectives on Mergers." Journal of Economic Perspectives (2001): 103-120. NewEvidenceMergers.ppt

target-gain-goodfile.doc 

S. B. Moeller, F. P. Schlingemann, R. M. Stulz, “Firm Size and the Gains From Acquisitions,” Journal of Financial Economics 73, 2004, 201-228.
J. Harford, M. Humphery-Jenner, R. Powell. “The sources of value destruction in acquisitions by entrenched managers,” Journal of Financial Economics, Volume 106, November 2012, Pages 247–26.
S. Bhagat, M. Dong, D. Hirshleifer and R. Noah, "Do Tender Offers Create Value?" Journal of Financial Economics, 2005, V76 N1, 3-60. b-hirshleifer.ppt
U. Malmendier and G. Tate, “Who Makes Acquisitions? CEO Overconfidence and the Market’s Reaction,” Journal of Financial Economics 89, 20-43, 2008. CEO-Overconfidence.ppt
M. Zhao and K. Lehn, “CEO Turnover After Acquisitions: Do Bad Bidders Get Fired?” 2006, Journal of Finance 61, 1759-1812.


Spinoffs and Corporate Refocusing

P. G. Berger and E. Ofek, “Causes and Effects of Corporate Refocusing Programs,” Review of Financial Studies 12, 1999, 311-346. Spinoffs.ppt


S. Krishnaswami and V. Subramaniam, “Information asymmetry, Valuation, and the Corporate Spin-off Decision,” 1999, Journal of Financial Economics 53, 1999, 73-112.

C. Shareholder Voting and Activism


J.A. Brickley, R.C. Lease and C.W. Smith, Jr., "Ownership Structure and Voting on Antitakeover Amendments," Journal of Financial Economics 20, 1988, 267-292. Antitakeover.ppt
S. Bhagat and R.H. Jefferis, "Voting Power in the Proxy Process: The Case of Antitakeover Charter Amendments," Journal of Financial Economics 30, 1991, 193-226.
L. Bebchuk, A. Brav and W. Jiang, “The Long-Term Effects of Hedge Fund Activism,” Harvard University working paper, 2013.
A. Brav, W. Jiang, F. Partnoy, and R. Thomas, “Hedge Fund Activism, Corporate Governance, and Firm Performance,” 2010, Duke University working paper.
Paul Gompers*, Steven N. Kaplan and Vladimir Mukharlyamov, “What Do Private Equity Firms Do?” 2014, Harvard University working paper.
Steven Davis, et al, “Private Equity, Jobs, and Productivity,” 2014, University of Chicago working paper.
Corporate Governance Matters Chapter 12.

D. Corporate Board Structure


Corporate Governance Matters Chapters 3, 4, and 5.
Gompers, P. A., J. L. Ishii, and A. Metrick, 2003, Corporate governance and equity prices, Quarterly Journal of Economics 118(1), 107-155.
S. Bhagat and B. Bolton, “Corporate Governance and Firm Performance,” Journal of Corporate Finance 14, 257-273, 2008. Corporate Governance – Performance.ppt
S. Bhagat and B. Bolton "Director Ownership, Governance and Performance," Journal of Financial & Quantitative Analysis, 2013, Sox-GovernancePerformance.
S. Bhagat , B. Bolton, and R. Romano, “The Promise and Pitfalls of Corporate Governance Indices,” Columbia Law Review, v108 n8, pp 1803-1882, 2008


E. Management and Board Compensation



Corporate Governance Matters Chapter 8.
S. Bhagat and B. Bolton, “Bank Executive Compensation And Capital Requirements Reform” Journal of Corporate Finance, 2014. IBCompensation
S. Bhagat , B. Bolton, and R. Romano, “Getting Incentives Right: Is Deferred Bank Executive Compensation Sufficient?” Yale Journal on Regulation, 2014.
S. Bhagat, “Bank Capital and Executive Compensation Reform: Preventing the Next Financial Crisis” 2016. [Bank-Capital-Compensation-Reform-032816.pdf]

F. Corporate Social Responsibility


Kitzmueller, Markus and Jay Shimshack. "Economic Perspectives On Corporate Social Responsibility," Journal of Economic Literature, 2012, v 50(1), 51-84.
Simons, Robert, “The Business of Business Schools: Restoring a Focus on Competing to Win,” Harvard Business School, Capitalism and Society: Vol. 8: Iss. 1 , Article 2., 2013.
Guenther, David et al, “Do Socially Responsible Firms Pay More Taxes?” Accounting Review, 2016.

IV. Course Policies


Course Schedule
January 11 Introduction

January 18 Martin Luther King, Jr. Holiday

January 25 Corporate Control

February 1 Corporate Control Proposal due

February 8 Corporate Control

February 15 Shareholder Voting and Activism

February 22 Corporate Board Structure

February 29 Corporate Board Structure

March 7 Management and Board Compensation Paper first-half due

March 14 Midterm Exam

March 21 Spring Break

March 28 Management and Board Compensation

April 4 Governance and Venture Financing

April 11 Corporate Social Responsibility Paper due

April 18 Student Presentations

April 25 Student Presentations

May 4 Final Exam 7:30 pm
Grading

The grade breakdown is as follows:



Item Weight

A. Class participation and attendance 10%

B. Term Paper (proposal, due: February 1) 5%

C. Term Paper (first-half, due: March 7) 15%

D. Term Paper (due: April 11) 15%

E. Term Paper (presentation) 15%

F. Midterm Exam (March 14) 20%

G. Final Exam (May 4) 20%


A. Class participation is critical to the success of this course. Student questions and comments are expected and welcome. Attendance will be taken at random (unannounced). Students are requested to place their name-cards in front of their desk at all times during class.

The class will be conducted in a professional manner: Students and the instructor are expected to be prepared for each class, and behave professionally in the class.

B. Proposals for the term paper are due on February 1, 2016, before the start of class. The proposal should answer the following two questions:


  • What will the paper be about?

  • Why is this topic interesting and important?

You should also include a list of at least four academic papers or book chapters that you intend to read as background for your paper. The proposal should be no more than a page.
C, D, E. The term paper draft is due on March 7, 2016, before the start of class. The term paper draft should be at least ten pages long double-spaced pages (twelve-point font, one-inch margin all-around), and include the following:

  • What is the paper about?

  • Why is this interesting and important to study/read?

  • A critical survey of the literature.

  • Outline of the original analysis that would be of interest to somebody in the real world: Chairman of Board, CEO, CFO, policy makers and their staffs, compensation consultants, investment bankers, or private equity investors.

  • References that includes at least four academic papers or book chapters.

The term paper is due on April 11, 2016.


Student presentations are scheduled for April 18 and 25, 2016. The paper can be on any topic that will be covered in the course. The paper should include a critical survey of the literature and some original analysis that would be of interest to somebody in the real world: Chairman of Board, CEO, CFO, policy makers and their staffs, compensation consultants, investment bankers, or private equity investors. The paper (including exhibits) should be between 20 and 25, double-spaced pages (twelve-point font, one-inch margin all-around).

On your paper please note the following:



On my honor, as a University of Colorado at Boulder student, I have neither given nor received unauthorized assistance on this paper.

A Note on Academic Honesty & Plagiarism: The development of the Internet has provided students with historically unparalleled opportunities for conducting research swiftly and comprehensively. The availability of these materials does not, however, release the student from appropriately citing sources where appropriate; or applying standard rules associated with avoiding plagiarism. Please see http://www.colorado.edu/academics/honorcode


Grade distribution:

http://leeds.colorado.edu/asset/undergraduate/gradingpolicy.pdf


Also, please review

http://www.colorado.edu/policies/fac_relig.html,

http://www.colorado.edu/policies/classbehavior.html,

http://www.Colorado.EDU/disabilityservices,

and http://www.colorado.edu/policies/discrimination.html.


Guidance to Faculty Regarding Grade Distributions


In May 2011, the faculty of the Leeds School voted to establish the “grading guidelines” shared below.

With this vote, the faculty returns to its preͲ2009 approach of grading guidelines.


These guidelines embody the faculty’s consensus about competition and fairness within, and across, classroom experiences at Leeds. In its discussions and preparations, the faculty relied heavily on norms and customs at topͲtier business schools throughout the U.S.
The following matrix provides guidance on grade distributions either at the course level or aggregated

across multiple, simultaneous sections.




Course Level

Maximum Average Course Grade

Recommended Distribution

1000 and 2000

2.8

Not more than 15% AͲ or above

Not more than 65% BͲ or above



At least 35% C+ or below

3000

3.0

Not more than 25% AͲ or above

Not more than 75% BͲ or above

At least 25% C+ or below



4000

3.2

Not more than 35% AͲ or above

Not more than 85% BͲ or above

At least 15% C+ or below



Guidelines for the Term Paper
Suggested order for the sections:

Cover Page

Paper Title, Student Names, Course, Date



Executive Summary


No more than one page. The most important part of your paper! Briefly explain what the paper is about, why this is an interesting and important topic, and your main findings/conclusions. Consider an entrepreneur, investment banker, investor, or venture capitalist as your primary reader of this page.

Introduction
What is the paper about?
Motivation: Why is this interesting and important to study/read?
Overview of the paper.
(Main Body)
Please consider using sub-sections to better organize your paper, and improve its readability.

Please check the transition between paragraphs.



(Footnotes on same page.)


Summary and Conclusions
Exhibits (Tables, Graphs, etc.)
Captions and legends in the exhibits should make them self-explanatory. Cite data sources.
References

____________________________________________________________________



Check for grammar and spelling.
All arguments/assertions should be supported using:

logical constructs, and/or

theoretical considerations (cite references), and/or

previous empirical evidence (cite references).


Paper should be revised by you at least four times over a period no less than a week.
F. The exam will consist of essay-type questions, and will be closed-book, closed-notes, and in-class. The exam will be based on study questions that will be handed out during the semester. The exam will be graded anonymously in the sense that students will not write their names on the exam and at the time I grade the exam I will not know whose exam it is.


Readings
You are advised to read the “critical portions” of the assigned readings for a particular class before that class. The critical portions of a reading include the abstract, introduction, summary/conclusions of the paper. You might wish to read the main body of the paper after we have discussed it in class.

V. Additional Readings (Particularly helpful if your term paper is on one of the following topics)


B. Corporate Control
Mergers and Takeovers


  1. S. Bhagat, A. Shleifer, and R.W. Vishny, "Hostile Takeovers in the 1980s: The Return to Corporate Specialization," Brookings Papers on Economic Activity, 1990, 1-84. target-gain-goodfile.doc 




  1. G. Andrade, M. Mitchell, and E. Stafford. "New Evidence and Perspectives on Mergers." Journal of Economic Perspectives (2001): 103-120. NewEvidenceMergers.ppt




  1. E.H. Kim and V. Singal, "Mergers and Market Power: Evidence from the Airline Industry," American Economic Review 83, 1993, 549-569.




  1. Hosken, Daniel S. and Tenn, Steven, Horizontal Merger Analysis in Retail Markets (January 19, 2015). Available at SSRN: http://ssrn.com/abstract=2552548 or http://dx.doi.org/10.2139/ssrn.2552548




  1. S. Bhagat, M. Dong, D. Hirshleifer and R. Noah, "Do Tender Offers Create Value?" Journal of Financial Economics, 2005, V76 N1, 3-60. b-hirshleifer.ppt




  1. S. B. Moeller, F. P. Schlingemann, R. M. Stulz, “Firm Size and the Gains From Acquisitions,” Journal of Financial Economics 73, 2004, 201-228.




  1. S.B. Moeller, F. P. Schlingemann, and R.M. Stulz, “Wealth Destruction on a Massive scale? A Study of Acquiring-Firm returns in the Recent Merger Wave, Journal of Finance 60, 2005, 757-782.




  1. J. Harford, M. Humphery-Jenner, R. Powell. “The sources of value destruction in acquisitions by entrenched managers,” Journal of Financial Economics, Volume 106, November 2012, Pages 247–26.




  1. U. Malmendier and G. Tate, “Who Makes Acquisitions? CEO Overconfidence and the Market’s Reaction,” Journal of Financial Economics 89, 20-43, 2008.




  1. M. Zhao and K. Lehn, “CEO Turnover After Acquisitions: Do Bad Bidders Get Fired?” 2006, Journal of Finance 61, 1759-1812.




  1. S. Bhagat, S. Malhotra and P.C. Zhu, “Emerging country cross-border acquisitions: Characteristics, acquirer returns and cross-sectional determinants,” Emerging Markets Review, Volume 12, September 2011, Pages 250-27.

11. I. Erel, R.C. Liao, and M.S. Weisbach, “Determinants of Cross-Border Mergers and Acquisitions,” Journal of Finance 67, 2012, pages 1045–1082.





Download 0.68 Mb.

Share with your friends:
  1   2   3   4   5   6   7




The database is protected by copyright ©sckool.org 2022
send message

    Main page