Students must choose 2 topics from the 3 listed below. Each topic consists of 2 questions; students must answer both parts of each topic, for a total of 4 responses. All questions carry equal marks.
As a general guide, each response should be 500 words, for a total of 2200 words minimum (maximum of 3000). Each response should include at least 2 citations of reference sources (e.g., Goergen, 2012), which may include textbooks, articles, cases, or high-quality media.
Minimum 2200 words, maximum 3000 words, not including references. 12 pt, 1.5 spacing. Weighted at 70% of module mark. Due 21st March.
TOPIC 1: Agency theory and conflicts of interest
1a) Conflicts of interest may occur between:
• Owners or providers of finance and top managers,
• shareholders and stakeholders, and
• different types of shareholders (majority and minority).
Choose ONE of these and discuss the conflict of interest and how it might be reduced. 1b) What are agency problems and why do they occur? Give at least two examples of
agency problems from class cases or your own reading.
TOPIC 2: Corporate ownership and control
2a) What are some differences in corporate governance and control issues between Anglo-American and Continental European systems? Discuss at least two basic differences. Give an example using a company or case from class, the reading, or your own research.
2b) What are some methods by which a publicly listed firm may have dispersed financial ownership while maintaining strong control of voting rights? Give an example of this type of governance configuration. Discuss the possible consequences of pursuing this structure.
TOPIC 3: Incentives and behavioural biases
3a) What devices can be used to discipline top managers to act in the best interest of firms? Describe at least three devices and their advantages and disadvantages.
3b) How can behavioural biases such as framing, overconfidence, risk taking, or loyalty (or others) influence business decisions? Describe an example of at least one of these biases having a major impact in a financial context.
