...The Role of Corporate Law in Preventing a Financial Crisis: Reflections on In re Citigroup Inc. Shareholder Derivative Litigation Franklin A. Gevurtz* TABLE OF CONTENTS I. INTRODUCTION .................................................................................................. II. CITIGROUP AS A CASE STUDY IN EXCESSIVE RISK-TAKING .............................. III. TOOLS FOR CURBING EXCESSIVE RISK-TAKING AND THE ROLE OF CORPORATE LAW ............................................................................................... A. The Tools for Curbing Excessive Risk-taking ............................................. 1. Regulation of Business Activities .......................................................... 2. Capital Requirements ........................................................................... 3. Compensation Rules ............................................................................. 4. Liability for Unreasonable Risks .......................................................... 5. Selection of Management (Rules of Corporate Governance) ............... B. Dividing the Tools Between Banking and Corporate Law .......................... IV. WHY IT MATTERS: CITIGROUP AS AN ILLUSTRATION OF THE LIMITATIONS OF STATE CORPORATE LAW ........................................................ A. Citigroup As a Case Study In Weak Corporate Law................................... 1. Overview ..................................................
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...Reflection 2013 -------------------------------------------------------- Kaplan University Corporate Finance MT480-01 Instructor: Craig Mayberry Cynthia Buff 03/06/2013 This document is to reflect on the things I have learned during this course and how I will use them in the future. I also discussed how I see my future as a business student and development of my professional out look on finance. Reflection 2013 During my reflection of this course I have found that I have learned a number of things that will help me in my career choice. I think that after completing this course I am able to understand and explain some of the roles in Corporate Finance. I also understand the expectations of this course and I can analyze financial statements now. I am able to explain why the present values are important to a company valuing there projects and calculating the present value of a lump sum, an annuity, and a perpetuity. I can also calculate the discount rates along with explaining the differences between simple interest and compound interest. I can now use long term financial techniques and formulate financial forecasting methods. I can also explain and discuss variance and standard deviation as the measures of risk for both securities and portfolios. During this course I have learned to explain diversification can reduce risk for companies. I can explain how beta is used as a measure for risks and how to explain an idea of efficient portfolios, and explaining the capital...
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...Identify Risk and Plan Risk Management MacVille Assessment 1 Submission details (Due: week 6) Candidate’s name | | Student ID | | Assessor’s name | Olga Borovkova | Email | | Assessment site | Cambridge International College | Assessment date/s | | Time/s | | Contents Risk Context 2 Have your read the assessment????? 2 Your role and task 3 Internal Risks Context 3 External Risks Context 4 Evaluation Criteria 4 MacVille Risk 4 SWOT 5 Check list 5 Stakeholders 5 Research 5 Risks 5 Risk Analysis 5 Risk likelihood table 5 Risk consequences table 6 Risk Matrix table 6 Level of risks for MacVille 6 Risk evaluation 6 Control Measures 7 Resources 7 Consultation 7 Appendices 7 Appendix 1: MacVille Risk Register 8 Appendix 2: MacVille Risk Treatment Action Plan 9 Risk Context See for some examples: https://sielearning.tafensw.edu.au/toolboxes/toolbox904/toolbox904/u2_cond_risk_ass/u210_estab_conte/u210_estab_conte.htm Have your read the assessment????? Please, do not just list what is in the template. You must discuss and explain why it is important to know or discuss, or understand? Your role and task You have recently been assigned to work in a project team charged with the implementation of the new business endeavour for MacVille. Your duties within the project team include: * risk identification * analysis * evaluation * implementing and monitoring risk treatment, particularly in own areas of...
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...Q 1: Advantage: 1. Risk identification: If all the risks have been identified at the beginning of a business project, the outcome and the solution of the risks can be considered before start and reduce potential lost. 2. Reduce compliance costs: The unprofitable part of the business can be eliminated or outsourced after risk analysis so that the risk is transferred. Reducing the areas of responsible business will allow the company to devote resources to the most profitable parts and eliminate the risks that were associated with those abandoned segments. 3. Enhance quality of product or service: The chance of emergency cases have been reduced so that the quality of product or service can be ensured at a certain level. 4. Increase efficiency and productivity: All risks have been figured out so that staff can be easily to distributed at suitable position and thus increase the efficiency. The productivity will be strengthened by practical division of labour and specification. 5. Improve relationships communication with stakeholders: Each identified risk can be discussed among various stakeholders to eliminate or minimize the risks assessed. This brings the various views onto the table and in the process of finalizing potential solutions as all stakeholders (including clients, employees, suppliers and contractors, etc.)are involved. 6. Enhance business planning and achievement of objectives and goals: Each risk is described along with its attributes such as...
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...Risk Management Plan | Baylor University Dormitory Project | | Presented by: | Approved by: | Version 3 | 10/16/2012 | | Table of Contents Table of Contents………………………………………………………………………………………………………2 Introduction…………………………………………………………………………………………………………….3 Project Description and Objectives…………………………………………………………………………………….3 Objectives of the Risk Process………………………………………………………………………………………3-4 Project Sizing…………………………………………………………………………………………………………..4 Stakeholders and Analysis……………………………………………………………………………………………..5 The Risk Process……………………………………………………………………………………………………….6 Risk Breakdown Structure……………………………………………………………………………………………..7 Probability-Impact Matrix……………………………………………………………………………………………...8 BUD Project Risk Register………………………………………………………………………………………....9-11 Summary Risk Report…………………………………………………………….……………………………….12-15 Conclusions and Recommendations………............................................................................................................15-16 References…………………………………………………………………………………………………………….16 Introduction This document is the risk management plan for the Baylor University Dormitory (BUD) Project. The defining risk management process contained herein shall be employed throughout the life of this project. As the team leader and the primary representative of Quantum Electric, the project manager is responsible for reviewing and maintaining this risk management plan throughout the course of this project. The accountability...
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...are a reflection of peoples' attitudes and the way they do things. Perhaps they do not all happen on the same project. Yet the reality is that if project sponsors do not start out with an understanding of project management and its processes, the probability of these kinds of happenings are quite high! One of the best ways of learning is from mistakes — preferably from the mistakes of other people. The focus of the case study centers on construction. However, the project has served to bring to light many of Woody's management shortcomings that are not untypical of management attitudes in other industries. In hindsight it is easy to spot the problems, but the issue is how can you head them off at the start of a new project? The answer is probably to be found in the prudent application and use of project risk management. But for successful risk management, it is necessary to understand the concepts, and obtain the active participation of the key players in the process and who must buy in to the process's findings. Projects take place in a very uncertain world, and the purpose of project management is to achieve a successful outcome and all that this implies. A key part of successful project management is to apply project risk management. You do this with a view to taking advantage of opportunities and heading off potential risk events that negatively impact the project's outcomes. Project opportunities and risks can impact all areas of the project management body of...
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...Space exploration is as close to pure risk as any of us can conceive. A rocket blows upon launch or it doesn’t. A space craft reaches its destination planet or it doesn’t. The craft lands safely on the planet surface or it doesn’t. We can easily envision these risks, and this makes the process of managing them relatively transparent. Even better, the risk management jargon needed to understand the risk management process is minimal. Mostly, this case requires a thorough reading and some deep thinking. What better way to introduce good risk management than with such a transparent example. Should Gentry Lee delay or go forward with the Mars Biological Explorer (MBE) mission? This is, of course, the over-riding question for this case and your analysis should answer it. However, in coming to your recommendation you will need to identify and discuss the key risk management processes implemented by Lee and the role each played in aiding you with your recommendation. As part of your analysis, place the problem faced by Gentry Lee in its historical context. For example, what are the effects of JPL’s and NASA’s past failures on the many players involved and the risk management program that Lee implemented? The following questions should help launch your analysis of this case. Use your answers to them as a jumping off point for your thought processes. 1. In what ways are the risks that JPL faces similar to those faced by other firms? In what ways are they different...
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...Risk Management Assessment Survey Prairie Lakes Hospital serves the northeastern area of South Dakota. Prairie Lakes measure the progress made by accounting for all goals meet and adding additional goals for each care management initiative. This focus will improve the quality of health care provided to clients. At one time risk management meant the management of any potential claims from potential malpractice, workers’ compensation, casualty, and property losses. This basically includes protection and prevention of accidents in any organization (MHHS, 2011). Currently risk management must take on a more global definition that includes the enterprise of financial management (McGuire, 1995). Prairie Lakes Hospital has taken steps to prevent losses by predicting potential problems and creating an action plan and teams of individuals to track any changes in a given area. Risk managements purpose in health care is to protect patient safety, quality of services, staff and visitor protection, financial losses, risk detection and prevention (MHHS, 2011). Prevention of financial losses can be found done by evaluation of the hospitals finances on a regular basis. Overall risk management protects the organization’s assets and continually identifies and addresses the sources of all risks and losses of an organization. Risk management’s goal is to protect the assets of an organization and work to identify and fix all areas and sources of risk. In the case of Prairie Lakes Hospital...
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...what ways are the risks that JPL faces similar to those faced by other firms? In what ways are they different? 2. Who are JPL’s stakeholders? How different are they from the stakeholders in a publicly-traded firm? 3. Why do these differences matter, that is, do the differences identified by questions 1 & 2 affect how the MBE program’s risks are managed? 4. How closely does Lee’s risk management process follow the five steps of risk management – identify, evaluate, choose, implement and monitor? a. Identify. How does Lee’s program ensure all risks are identified? b. Evaluate and choose. How are the risks evaluated and the key risks selected? c. Implement. Effective risk management allocates the greatest resources towards mitigating the most critical risks. How does Lee’s program accomplish this? Absent such a clearly defined allocation process, what might go wrong with a resource allocation process? d. Monitor. Risk management is an ongoing process. Risks must be constantly monitored to ensure that mitigation strategies are working and emerging risks identified. What features of Lee’s program did this? 5. How does JPL balance the costs of risk with the costs of mitigating those risks? How does it balance the conflicting needs for control and creativity? 6. Risk appetite is defined as the amount of risk a business is prepared to tolerate at any point in time, e.g., the amount you a willing to lose during one day at a casino. Risk tolerance is a reflection...
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...Assessment Cover Sheet (Print all details and attach to front of assessment task/assignment before submitting) Name | ------------------------------------------------- Fatih Budak | Student ID | ------------------------------------------------- s1421411 | Phone number | ------------------------------------------------- 0412156758 | Email | ------------------------------------------------- s1421411@nmitstudent.vic.edu.au | Course code & name | ------------------------------------------------- Associate Degree of Accounting | Unit code & name | BACC202 - Risk management corporate governance and ethics - S1, 2015 | Name of assessment | ------------------------------------------------- Assignment 1 | Due Date | 27/03/2015 (Submission after the due date is subject to penalty) | Teacher name | ------------------------------------------------- Shirley Wong | Instructions | ------------------------------------------------- | Declaration: Read, tick and sign below * I declare that the attached assessment I have submitted is my own original work and any contributions from and references to other authors are clearly acknowledged and noted. * This document has been created for the purpose of this assessment only and has not been submitted as another form of assessment at Melbourne Polytechnic or any other tertiary institute. * I have retained a copy of this work for my reference in the event that this application is lost or damaged...
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...Third-Party Risks According to the article, “Working Well Together”, managing third party risks is becoming an increasing concern within financial institutions. The article is a compilation of respondents’ answers concerning third party risks. The article outlined three major issues in connection to third party risk: third part risk is causing harm, management program needs to be improved, and not having the full visibility of third party risks. Companies are asking how to gain more visibility into third party risks, who really “owns” the risks, and how can companies set priorities and improve efficiencies. Due to limited resources, most institutions have some type of third party interactions. Companies interact with third party vendors from supplier, transportation, business services, equipment, marketing & sales, & joint ventures. 65% of respondents advise they use third party vendors regularly in their lines of business while only 4% advised they rarely or never use third party vendors. 38% of the respondents expect an increase in their usage of third party vendors while 9% estimate a decrease. The largest third party vendor is from the technology sector and business services being the runner up. Article Summary The article states that since 65% of companies rely on third party vendors this increases their risk and exposure. At the time of the survey, only 2 companies didn’t use third party vendors. Companies working with third party vendors can have...
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...Components Put Sales at Risk” Why all partners must carry consequences for the associated risk within the Supply Chain Author: Mathijs Cornelis van Itterzon What are the consequences of a tsunami in Japan, with respect to the price of Apple stocks? If we ask a regular person this question, one may answer that it doesn’t have that much influence at all. Mainly because people have never heard of the company ShinEtsu, which is responsible for manufacturing thin silicon wafers for Apples products (Der Spiegel, 2011). What many people do not know is that when this Japanese manufacturer has been overwhelmed by a natural disaster risk of stock-out may appear and may harm other partners within the supply chain. One of the major customers is Foxconn in Taiwan which manufacturers Apple’s iPhone and iPad. Still we rely that Apple controls their supply chain well in order to produce sufficient iPhones for the market. Taiwan’s Foxconn is able to produce the iPhones and iPad due to the efficient and ‘justin-time’ delivery from the Japanese manufacturer. Natural disasters like the tsunami in Japan may disrupt the continuity in the supply chain with all the associated consequences. Risk management and mitigation strategies are suitable solutions, which may prevent a supply chain breakdown because one will get insight in high-risk situations, such as the situation in Japan and hence consider how to reduce the associated consequences (Chopra & Sodhi, Managing Risk to Avoid Supply Chain Breakdown...
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...in his current and prior roles. The budget submitted by Mr. Mistri was a reflection of his concerns about the risk return ratio of his branch, which is the return in terms of risk for a specific time period, oil prices decreasing based on the recession Indonesia is going through, and the high staff turnover, a situation that he also considers a serious constraint to the growth of the branch. Raising a budget when your corporate office requires revision of the original is not an easy task. You can’t be too conservative, but being too aggressive is also a big risk. If it was a fairly easy decision, Mr. Mistri would have been the first one interested in raising the forecasted budget, not just because it measures the overall success of his operation, but also based on the incentives he would receive. In the case of a country manager, compensation based on performance could range up to approximately 70% of their base salary. The only thing that makes me question Mr. Mistri’s approach to his original budget is the fact that he decided to operate with a sovereign self-impose risk limit that is lower than the one approved from the corporate office. I understand he is responsible for both, managing risk and generating profit, but he might be too conservative in the eyes of the corporate office considering that he is performing under the risk limit approved by Citibank’s management. And sometimes, risks can be taken regardless of economic climate. Scenario A Without knowledge...
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...some problems. Accountability will therefore, undertake to align organizational objectives with some actions such as wanting some people out of the organization due to non accountability issues. Accountability will seek avoid countermeasure decisions that blames will encourage. (Garrett, 1967). Accountability will seek to find out the actual facts through understanding of the problem at hand. It also tends to disregard the reported or second hand information and data that blame situations would advocate this point accountability will seek to trace the history of the problem at hand to get first hand information and facts that blame cannot reach. Accountability will also seek to fit the findings together by making big picture reflections on someone’s problem. This will help find out problems experienced and how best the problem is getting...
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...Week Six Learning Team Reflection Law/531: Business Law John Fossum November 11, 2012 Introduction: With the current economy the markets are expanding and taking companies globally. Laws in on how business is conduct varies vastly from country to country. It is important that the laws are understood and not confused with others. There are global practices that have been put in place as well to help protect businesses that conduct business globally. The Foreign Corrupt Practice Act of the 1970’s is just an example of the United States law that was put in place to protect companies. Team C elaborates on these practices through the review of several articles. Future of Anticorruption Laws Stricter laws against corruption in international business transactions gained momentum during 2010. In reaction to fraudulent practices abroad, the United States authorities collected larger fines and imposed stiffer penalties in concordance with the Foreign Corrupt Practices Act (Morley, Hadley, & Saulnier, 2011). FCPA violations are a new law enforcement priority and are concurrent with the emphasis on fighting global terrorism. In addition, the United Kingdom revised their anti-bribery laws to impose greater regulations than the FCPA (Morley, et al. 2011). In response to the increase in number of cases, the United States adopted more aggressive enforcement measures, expansive jurisdiction, and bounty payments to whistle-blowers (Morley, et al. 2011)...
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