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Corporate Governance Mechanisms in Action

其他書名	The Case of Air Canada
出版	SSRN, 2006
URL	http://books.google.com.hk/books?id=vkDIzgEACAAJ&hl=&source=gbs_api

註釋The resolution of conflicts between shareholders and managers, at minimal cost, is the goal of corporate governance. In 1999, an intriguing series of events occurred that dramatically reshaped the Canadian airline industry. This clinical study considers these events in relation to the four mechanisms that shareholders rely upon to ensure managers do not act in their own self-interest at the expense of investors: 1) the board of directors, 2) aligning the interests of the two parties, 3) the actions of the market, and 4) takeovers. The results of this clinical study suggest that these four mechanisms may not be sufficient to control a management team that is committed to a course of action and to retaining their positions. This case illustrates that agency costs are real for shareholders and that the goals of management may be in conflict with and even supercede those of shareholders. In practice, corporate governance can be severely limited. This can be the case even when the majority of board members are unrelated to the company. In addition, institutional shareholders may not be the disciplining force that theory and logic suggests. Overall, the results of the study imply that managerial entrenchment is a powerful motivating force that may be impossible to counter even for a large, poorly performing corporation that is subject to a very attractive takeover offer.