Capital Contribution Mechanisms
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a mechanism established to allow different parties to contribute capital, expertise, and labor for their mutual benefit

corporation

participates in the profits of the enterprise without taking responsibility of the operations

investor/shareholder

runs the company without being responsible for personally providing the funds

Management

Owners

<p>Shareholders</p> Signup and view all the answers

Headed by the chief executive officer

<p>Management</p> Signup and view all the answers

Elected by the shareholders to represent their interests

<p>Board of Directors</p> Signup and view all the answers

► Relationship among stakeholders that is used to determine a firm’s direction and control on its performance. ▪ How firms monitor and control top-level managers’ decisions and actions affects the implementation of strategies ▪ Effective governance aligns manager’s decisions with shareholders’ interests can help produce a competitive advantage for the firm.

<p>CORPORATE GOVERNANCE</p> Signup and view all the answers

Three (3) Internal governance mechanisms are used in modern corporation:

<p>▪ Ownership Corporation ▪ The Board of Directors ▪ Executive Compensations</p> Signup and view all the answers

  • seeks to align the interests of managers and owners through salaries, bonuses and long-term cash incentives i.e. stock awards and options.

<p>Executive Compensations</p> Signup and view all the answers

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