Professor Rui Albuquerque was our last lecturer. He's not from HBS but a assistant professor of finance and economics at the Boston University. Dr. Albuquerque focuses his research on international finance, capital markets, and governance. The Friday was spent on discussing characteristics of corp governance, espcially the roles of shareholders, the board, and management.

Topics ranged from agency costs, different types of captured board, management compensation, direct action by shareholders, hostile takeovers and anti-takeover provisions, media and regulation as watchdogs, inside trading, SOX, and ownership and control. For me, the two last ones presented the most interesting discussions.


Onwership and control

Owning shares of a company makes you an owner, and you think you may have an equal share of control. In the US, the agency conflict tends to be between shareholders and managers, but in other countries it is usually between the controlling shareholders and minority shareholders. This is especially true in Finland, where 70% of the firms are cotrolled by less than 20% of shareholders. Although shares with different voting rights are not popular any more, there are a number of different ways of gaining control over the number of shares you own.


Sarbanes-Oxley Act

SOX is a familiar topic for me, having worked at Nokia both before and after SOX was introduced in 2002. The class had a lively discussion on the pros and cons of SOXs. An interesting piece of news was a 16,5% premium on foreign companies who list in their home excganches as well as in a US based exchange, due to having to implement SOX. Or due to something else.