6
What you describe is neither unusual nor pernicious, and occurs more commonly at smaller companies when the company has borrowed significantly from a single bank. Larger companies have direct access to capital markets (in addition to stock, they can issue bonds and commercial paper, which are both forms of debt), and are thus less reliant on their ...
4
A classic reference that is somewhat related is Ronald Coase's "The Nature of the Firm". Coase set out to address the following puzzle: since markets are efficient, why do we need to organize into firms? Couldn't we just have each individual acting alone and rely on the market to put the pieces together into complete products? Coases answer to why this ...
2
For publicly own corporations, you can access their financial statements, where they record the amount of taxes paid (e.g. for Apple here). Notice that where the tax is paid depend on the location of the firm, and whether it is a multinational business. The latter type of firm is particularly problematic, because multinational companies use transfer pricing ...
2
In Sweden, 2 employees are members of the board in companies over 25 employees (by law). So at least here, not all board members are choosen by the shareholders.
One of the reasons many shareholders have stocks, is to influence the long term way the company is run. The main way to do this is by influencing which people are on the board. If big shareholders ...
2
Pre-Sarbanes-Oxley it was common for CEOs to nominate the members of the board of directors of their firms. A sub-committee of the board would determine the CEO's compensation, so a CEO could choose people loyal to him (even employees working under the CEO) for the board and those people could boost his compensation. And if they did not do so, he might also ...
1
WACC is the weighted average cost of capital - the price of money for the firm. All else equal, lower is always better.
1
There is a potential conflict of interest (not only for a chairman but also for any director or employee who owns shares in the company) arising from the possibility of insider trading. Suppose the chairman of a quoted company has a large shareholding and, through their position, becomes aware of information, not yet disclosed to the market, that means the ...
1
I've heard of this phenomenon but not for the reasons you suggest:
The largest corporations tend to have the most interlocks (Table 4).
This may occur because the directors of the largest corporations are
the most knowledgeable, the most capable, and the most accomplished
men available. Other corporations would naturally seek their advice
and ...
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