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Corporate GOvernance

Corporate GOvernance. Class Announcements. Assignment #8 due March 17 th ; available on-line Research Paper Part #3 due March 13 th (5:00pm)

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Corporate GOvernance

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  1. Corporate GOvernance

  2. Class Announcements • Assignment #8 due March 17th; available on-line • Research Paper Part #3 due March 13th (5:00pm) • Business Banquet - April 2nd – 5:45-8pm, Catering - Gabrieau's Bistro; Keynote Speaker - Annette Verschuren, Past President of Home Depot for Canada and Asia

  3. Research Paper Part #3 • Discuss the current academic research on your topic area • A brief synthesis by topic not by paper • Three (3) academic references required (excluding text and CPA/CICA Handbook) • Due: March 13th (5:00pm) • Worth: 2.5% • Length: Cover page, One page submission (double spaced), reference page with Parts #1 & #2, Marking Keys #1& #2attached to the back. • Part #2 – Average 1.86/2.5 (74%)

  4. Class Objectives • Contracts as a means to manage the expectations and relationship between principals and agents • Corporate Governance addresses agency issue

  5. Corporations: Corporate Governance • Private and Public Corporations • Separation of Ownership (Shareholders) and Management • Corporate Governance is the relationship between: • Shareholders (owners) • Board of Directors • Corporate Officers

  6. Corporate Governance: Defined • Corporate Governance is the relationship between shareholder, the board of directors and other top managers in the corporation • Corporate governance processes attempt to ensure proper functioning of management • Corporate governance is implemented and evaluated through various processes within the organization • Board of Directors – internal and external directors • Audit Committee – meet with auditor and review audited financial statements • Compensation Committee – set corporate officers compensation • Nominating Committee – nomination of qualified members • Securities Exchanges (e.g. OSC, SEC) • Reporting in Annual Report

  7. Enron: The Smartest Guys in the Room – The Movie • Enron: The Smartest Guys in the Room is a 2005 documentary film based on the best-selling 2003 book of the same name by Fortune reporters Bethany McLean and Peter Elkind, a study of one of the largest business scandals in American history. The film examines the 2001 collapse of the Enron Corporation, which resulted in criminal trials for several of the company's top executives; it also shows the involvement of the Enron traders in the California electricity crisis. The film features interviews with McLean and Elkind, as well as former Enron executives and employees, stock analysts, reporters and the former Governor of California.

  8. Enron: The Smartest Guys in the Room – The Movie

  9. Enron: The Smartest Guys in the Room - Update • Kenneth Lay - was indicted by a grand jury on 11 counts of securities fraud and related charges; died of a heart attack while on vacationing prior to sentencing and serving time. • Jeffrey Skilling - was convicted of multiple federal felony charges relating to Enron's financial collapse, and is currently serving 14 years of a 24-year, four-month prison sentence • Andrew Fastow - served a six-year prison sentence for charges related to these acts.

  10. Enron: The Smartest Guys in the Room -Outcomes • Outcomes: • Corporate Governance Regulation • Sarbanes Oxley (SOX) (US 2002) • National Policy (Canada 2005) • Accounting Regulation • No Special Purpose Entities (SPE) • Revised Revenue Regulation Policy • CEO and CFO Attestation of Responsibility for Financial Statements • Auditing Regulation • Professional Oversight (CPAB) • Auditor Independence - Increased Partner Review

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