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Corporate Governance, Corporate Social Responsibility and Business Globalization

1- Give ONE (1) example to describe how corporate social responsibility can be consistent
with effort of the management to maximize the firm's value.

2- Doing business in the era of globalization exposes a company to more challenges.
Provide ONE (1) example of these challenges and explain the action that a financial
manager must take in facing the challenge.

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588423 Corporate Governance Social Responsibility
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Corporate governance can be defined as the rules and procedures that influence the operations of the company and the decisions of its managers. Most corporate governance affects either the threat of removal (negative) or compensation (positive). For instance, the Board of Directors monitors senior managers, and as the case may be, disciplines them with negative actions or rewards them with positive actions. In addition, the capital structure of the company and the provisions to prevent a hostile takeover by other companies are part of corporate governance. While the previously mentioned corporate governance provisions are internal, there are also the external and environmental factors, such as laws, competition, media, and litigation.

The primary objective of a company is value maximization. Therefore, the management's objective is to maximize the stock price of the company. In general, it is good (1) for the shareholders and other people who have a stake ...

Solution Summary

This solution provides concise explanations to the importance of corporate governance, agency problem, corporate ethics, and the main objective of a firm. Two examples have been provided to explain corporate social responsibility and challenges of business globalization.