《国际金融学》经典学习课件-(3).ppt

1、Chapter 2Corporate Ownership,Goals,and Governance 2013 Pearson Education,Inc.All rights reserved.2-2 Who Owns the Business?Exhibit 2.1 distinguished between public ownership of commercial enterprises and privately owned companies.Public ownership may be wholly state-owned or partially publicly trade

2、d.State Owned Enterprises(SOEs)are created for business purposes rather than for regulation or civil activities.Private firms may be publicly traded(stock)or privately owned by partners or family.2013 Pearson Education,Inc.All rights reserved.2-3 Exhibit 2.1 A Taxonomy of Commercial Enterprises 2013

3、 Pearson Education,Inc.All rights reserved.2-4 Publicly Traded Shares The global marketplace trades both SOEs and private firms.Often firms“go public”via an initial public offering(IPO)and sell a portion of the firm to the public while retaining sufficient ownership to maintain control of the firm.C

4、onversely,some publicly traded firms go private when a single investor or group buys outstanding shares and ceases to trade.Family-controlled firms may prove to be more profitable.2013 Pearson Education,Inc.All rights reserved.2-5 Separation of Ownership from Management SOEs and widely held publicly

5、 traded companies typically separate management and ownership.This raises the possibility that ownership and management may not be perfectly aligned in their business and financial objectives,the so-called agency problem.2013 Pearson Education,Inc.All rights reserved.2-6 The Goal of Management Maxim

6、ization of shareholders wealth is the dominant goal of management in the Anglo-American world.In the rest of the world,this perspective still holds true(although to a lesser extent in some countries).In Anglo-American markets,this goal is realistic;in many other countries it is not.2013 Pearson Educ

7、ation,Inc.All rights reserved.2-7 The Goal of Management There are basic differences in corporate and investor philosophies globally.In this context,the universal truths of finance become culturally determined norms.2013 Pearson Education,Inc.All rights reserved.2-8 Shareholder Wealth Maximization I

8、n a Shareholder Wealth Maximization model(SWM),a firm should strive to maximize the return to shareholders,as measured by the sum of capital gains and dividends,for a given level of risk.Alternatively,the firm should minimize the level of risk to shareholders for a given rate of return.2013 Pearson

9、Education,Inc.All rights reserved.2-9 Shareholder Wealth Maximization The SWM model assumes as a universal truth that the stock market is efficient.An equity share price is always correct because it captures all the expectations of return and risk as perceived by investors,quickly incorporating new

10、information into the share price.Share prices are,in turn,the best allocators of capital in the macro economy.2013 Pearson Education,Inc.All rights reserved.2-10 Shareholder Wealth Maximization The SWM model also treats its definition of risk as a universal truth.Risk is defined as the added risk th

11、at a firms shares bring to a diversified portfolio.Therefore the unsystematic,or operational risk,should not be of concern to investors(unless bankruptcy becomes a concern)because it can be diversified.Systematic,or market,risk cannot however be eliminated.2013 Pearson Education,Inc.All rights reser

12、ved.2-11 Shareholder Wealth Maximization Agency theory is the study of how shareholders can motivate management to accept the prescriptions of the SWM model.Liberal use of restricted stock should encourage management to think more like shareholders.If management deviates too extensively from SWM obj

13、ectives,the board of directors should replace them.If the board of directors is too weak(or not at“arms-length”)the discipline of the capital markets could effect the same outcome through a takeover.This outcome is made more possible in Anglo-American markets due to the one-share one-vote rule.2013

14、Pearson Education,Inc.All rights reserved.2-12 Shareholder Wealth Maximization Long-term value maximization can conflict with short-term value maximization as a result of compensation systems focused on quarterly or near-term results.Short-term actions taken by management that are destructive over t

15、he long-term have been labeled impatient capitalism.This point of debate is often referred to a firms investment horizon(how long it takes for a firms actions,investments and operations to result in earnings).2013 Pearson Education,Inc.All rights reserved.2-13 Shareholder Wealth Maximization In cont

16、rast to impatient capitalism is patient capitalism.This focuses on long-term SWM.Many investors,such as Warren Buffet,have focused on mainstream firms that grow slowly and steadily,rather than latching on to high-growth but risky sectors.2013 Pearson Education,Inc.All rights reserved.2-14 Stakeholde

17、r Capitalism Model In the non-Anglo-American markets,controlling shareholders also strive to maximize long-term returns to equity.However,they are more constrained by other powerful stakeholders.In particular,labor unions are more powerful than in the Anglo-American markets.In addition,Governments i

18、nterfere more in the marketplace to protect important stakeholder groups,such as local communities,the environment and employment.2013 Pearson Education,Inc.All rights reserved.2-15 Stakeholder Capitalism Model The SCM model does not assume that equity markets are either efficient or inefficient.The

19、 inefficiency does not really matter,because the firms financial goals are not exclusively shareholder-oriented,because they are constrained by the other stake-holders.The SCM model assumes that long-term“loyal”shareholders those typically with controlling interests should influence corporate strate

20、gy,rather than the transient portfolio investor.2013 Pearson Education,Inc.All rights reserved.2-16 Stakeholder Capitalism Model The objective of the privately held firm is to maximize current and sustainable income.Exhibit 2.2 shows distinctions between publicly traded and privately held firms.A re

21、cent study shows that privately held firms use less financial leverage and enjoy lower costs of debt than publicly traded firms.2013 Pearson Education,Inc.All rights reserved.2-17 Exhibit 2.2 Public Versus Private Ownership 2013 Pearson Education,Inc.All rights reserved.2-18 Stakeholder Capitalism M

22、odel The SCM model assumes that total risk i.e.operating and financial risk does count.It is a specific corporate objective to generate growing earnings and dividends over the long run with as much certainty as possible.In this case,risk is measured more by product market variability than by short-t

23、erm variation in earnings and share price.2013 Pearson Education,Inc.All rights reserved.2-19 Operational Goals for MNEs The MNE must determine for itself proper balance between three common operational financial objectives:maximization of consolidated after-tax income;minimization of the firms effe

24、ctive global tax burden;correct positioning of the firms income,cash flows,and available funds as to country and currency.These goals are frequently incompatible,in that the pursuit of one may result in a less-desirable outcome in regard to another.2013 Pearson Education,Inc.All rights reserved.2-20

25、 Public/Private Hybrids Many firms are publicly traded but are still heavily influenced or even controlled by families.Exhibit 2.3 illustrates how family businesses on average out-perform indexes of public companies in the United States France,Germany,and Western Europe.2013 Pearson Education,Inc.Al

26、l rights reserved.2-21 Exhibit 2.3 The Superior Performance of Family 2013 Pearson Education,Inc.All rights reserved.2-22 Publicly Traded Versus Privately Held:The Global Shift Exhibit 2.4 illustrates how the number of U.S.publicly listed firms peaked in 1996 at 8,783.Today around 5,000 listings.The

27、 number of publicly listed firms world wide peaked in 2008.It is not clear if this is a permanent phenomenon or just a temporary impact caused by the international financial crisis.U.S.listings as a%of worldwide listings of publicly traded firms dropped from 33.3%in 1996 to 11%at year-end 2010.2013

28、Pearson Education,Inc.All rights reserved.2-23 Exhibit 2.4 The Superior Performance of Family 2013 Pearson Education,Inc.All rights reserved.2-24 Possible Causes in the Decline of Publicly Traded Shares Sarbanes-Oxley has added reporting requirements The growth of private equity markets The growth o

29、f Electronic Communication Networks(ECNs)helped reduce transaction costs,but also made it less profitable for brokerage houses to research smaller firms.Thus trading volume on smaller firms fell off and some ceased trading at all.2013 Pearson Education,Inc.All rights reserved.2-25 Corporate Governan

30、ce Although the governance structure of any company domestic,international,or multinational is fundamental to its very existence,this subject has become a lightning rod for political and business debate in the past few years.Spectacular failures in corporate governance have raised issues about the v

31、ery ethics and culture of the conduct of business.2013 Pearson Education,Inc.All rights reserved.2-26 Corporate Governance The single overriding objective of corporate governance is the optimization over time of the returns to shareholders.In order to achieve this goal,good governance practices shou

32、ld focus the attention of the board of directors of the corporation by developing and implementing a strategy that ensures corporate growth and improvement in the value of the corporations equity.2013 Pearson Education,Inc.All rights reserved.2-27 Corporate Governance The most widely accepted statem

33、ent of good corporate governance practices has been established by the OECD:Shareholder rights.Shareholders are the owners of the firm,and their interests should take precedence over other stakeholders.Board responsibilities.The board of the company is recognized as the individual entity with final

34、full legal responsibility for the firm,including proper oversight of management.Equitable treatment of shareholders.Equitable treatment is specifically targeted toward domestic versus foreign residents as shareholders,as well as majority and minority interests.2013 Pearson Education,Inc.All rights r

35、eserved.2-28 Corporate Governance cont.Stakeholder rights.Governance practices should formally acknowledge the interests of other stakeholdersemployees,creditors,community,and government.Transparency and disclosure.Public and equitable reporting of firm operating and financial results and parameters

36、 should be done in a timely manner,and available to all interests equitably.2013 Pearson Education,Inc.All rights reserved.2-29 Structure of Corporate Governance The modern corporations actions and behaviors are directed and controlled by both internal forces and external forces(Exhibit 2.5).The int

37、ernal forces,the officers of the corporation and the board of directors,are those directly responsible for determining both the strategic direction and the execution of the companys future.The external forces include equity markets in which the shares are traded,the analysts who critique the company

38、s investment prospects and external regulators,among others.2013 Pearson Education,Inc.All rights reserved.2-30 Exhibit 2.5 The Structure of Corporate Governance 2013 Pearson Education,Inc.All rights reserved.2-31 Structure of Corporate Governance The board of directors is the legal body that is acc

39、ountable for the governance of the corporation.The senior officers of the corporation are the creators and directors of the corporations strategic and operational direction.Exhibit 2.6 illustrates how different corporate governance regimes lead to different characteristics of ownership,efficiency,an

40、d transparency.2013 Pearson Education,Inc.All rights reserved.2-32 Structure of Corporate Governance Equity markets should reflect the markets constant evaluation of the promise and performance of the company.Debt markets should reflect the companys ability to repay its debt in a timely and efficien

41、t manner.Auditors and legal advisors are responsible for providing an external professional opinion as to the fairness,legality and accuracy of corporate financial statements.Regulators work to ensure,among other things,that a regular and orderly disclosure process of corporate performance is conduc

42、ted so that investors may evaluate a companys investment value with accuracy.2013 Pearson Education,Inc.All rights reserved.2-33 Exhibit 2.6 Comparative Corporate Governance Regimes 2013 Pearson Education,Inc.All rights reserved.2-34 Failures in Corporate GovernanceFailures in corporate governance h

43、ave become increasingly visible in recent years.In each case,prestigious auditing firms missed the violations or minimized them,presumably because of lucrative consulting relationships or other conflicts of interest.In addition,security analysts urged investors to buy the shares of firms they knew t

44、o be highly risky(or even close to bankruptcy).Top executives themselves were responsible for mismanagement and still received overly generous compensation while destroying their firms.2013 Pearson Education,Inc.All rights reserved.2-35 Good Governance and Corporate Reputation Good governance SHOULD

45、 matter.Exhibit 2.7 describes a set of governance policies and practices Exhibit 2.8 shows selected governance rankings by IR Global.There are several international governance ranking agencies.Governance rankings and cost of capital do not appear to be highly correlated Anglo-American board members

46、do signal good corporate governance in non-Anglo-American firms.2013 Pearson Education,Inc.All rights reserved.2-36 Exhibit 2.7 The Growing Consensus on Good Corporate Governance 2013 Pearson Education,Inc.All rights reserved.2-37 Exhibit 2.8 IR Global Rankings:The Top 30 2013 Pearson Education,Inc.

47、All rights reserved.2-38 Corporate Governance ReformWithin the United States and the United Kingdom,the main corporate governance problem is the one treated by agency theory:with widespread share ownership,how can a firm align managements interest with that of the shareholders?Because individual sha

48、reholders do not have the resources or the power to monitor management,the U.S.and U.K.markets rely on regulators to assist in the agency theory monitoring task.Outside the U.S.and U.K.,large,controlling shareholders are in the majority these entities are able to monitor management in some ways bett

49、er than the regulators can.2013 Pearson Education,Inc.All rights reserved.2-39 The Sarbanes-Oxley ActThis act was passed by the U.S.Congress,and signed by President George W.Bush during 2002 and has three major requirements:CEOs of publicly traded companies must vouch for the veracity of published f

50、inancial statements;corporate boards must have audit committees drawn from independent directors;companies can no longer make loans to corporate directors;and companies must test their internal financial controls against fraudPenalties have been spelled out for various levels of failure.Most of its