Business and Society BUS 475 Stockholder Rights and Corporate Governance Objective • Upon completion of this lesson, you will be able to: – Analyze the challenges and opportunities that may influence where an organization fits on the continuum of socially responsible management Examine • • • • • Stockholders Corporate governance Special issue: executive compensation Shareholder activism Government protection of stockholder interests Stockholders • Shareholders-owners majority • Sarbanes-Oxley Act – Focus on Auditors and internal controls • Board are buffers between shareholders and CEO’s Corporate Governance • Corporate governance • Ownership concentration hinders performance Special Issue: Executive Compensation • Agency problem • Airlines tickets • Merger will cost flyer for years Shareholder Activism • Social investment • Social responsibility shareholder resolutions • Best to target the board of directors • More of a brake then a steering wheel Government Protection of Stockholder Interests • Ex-bankers in government positions • Derivatives are analogous to weapons • End investors in charge Stockholders and The Corporation • Ex-bankers in government positions • Derivatives are analogous to weapons • End investors in charge PROPERTIES On passing, 'Finish' button: On failing, 'Finish' button: Allow user to leave quiz: User may view slides after quiz: User may attempt quiz: Goes to Next Slide Goes to Next Slide After user has completed quiz At any time Unlimited times Summary • Stockholders • Corporate governance • Special issue: executive compensation • Shareholder activism • Government protection of stockholder interests • Board of directors Business and Society BUS 475 Consumer Protection Objective • Upon completion of this lesson, you will be able to: – Analyze the challenges and opportunities that may influence where an organization fits on the continuum of socially responsible management Examine • • • • Advocacy for consumer interests Consumer privacy in the digital age Special issue: product liability Positive business responses to consumerism • Consumerism’s achievements Advocacy for Consumer Interests • Collective efforts • Business practices – Complex – Services • Sell products or services How Government Protects Consumers • Safe guards – Information – Direct hazard – Pricing – Liability – Privacy Consumer Privacy in the Digital Age • Dilemma – Consumer self-help – Industry self-regulation – Privacy legislation Special Issue: Product Liability • Beauty Products high liability • Batch coding is a key – System for how and where – Coding using numbers and letters – Code must not fade – Retain 20 samples of each batch – Tamper proof safeguards Positive Business Responses to Consumerism • Opportunity Matrix – Product – Price – Place – Promotion Consumerism’s Achievements • Consumer expectations – High-quality goods and services – Reliable – Effective products • Key consumer rights – – – – – To be safe To be informed To have choices To be heard Privacy PROPERTIES On passing, 'Finish' button: On failing, 'Finish' button: Allow user to leave quiz: User may view slides after quiz: User may attempt quiz: Goes to Next Slide Goes to Next Slide After user has completed quiz At any time Unlimited times Summary • • • • • • Advocacy for consumer interests Safeguards Consumer privacy in the digital age Special issue: product liability Competitive advantage Consumerism’s achievements
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