CORPORATE GOVERNANCE

Key questions in corporate governance at public companies:

 Who runs this company?

 Who monitors these managers?
 How much power do you have as a stockholder in the company?

Start with the company’s own reports

 Annual reports
o Info about BOD
o Mission statement
o Corporate governance principles/ statement
 Fillings with regulatory authorities
o SEC (DEF14A for US, Reports on PSX)
 Assessing the board
o Board composition (Age, tenure, background, company to co. & CEO)
o Board operations (Who chairs the board, meetings, attendance, effectiveness: Keep
managers on their toes)
 Investor/ Analyst Activity
o Buy side (Biggest stockholders, history of these stockholders on corp govern)
o Sell side (Who are the analysts that track the firm, views on the stock)
o Activist (Are there any investors who are pains in the neck?)
 Rules of the game
o How is the voting structure set up?
 Multiple classes, with different voting rights?
 Golden shares? (or veto votes) (such as gov’s giving them veto power on big
acquisitions)
o Corporate Charter
 Find info about Takeover clauses (Anti takeover amendments etc)
 Voting rules (Proxies, voting at meetings)
 Nomination directors
 Do a comparison with other companies in the same sector