How would you realign corporate governance policies

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Reference no: EM133359211

Assignment:

Understanding various financial statements and the relationships between them is foundational to financial decision-making. Apart from committing outright fraud, there are many perfectly legal approaches a firm can use to make its financial picture look better to an outside investor or another stakeholder. Corporate executives do not always focus on long-term, value-maximizing goals, but may be driven by corporate incentives to increase stock prices in the short run. In addition, corporate governance provisions may be misaligned with value-maximizing goals causing managers to behave in a way that is not in the best interest of the organization.

Respond

. Examine the executives' motivations for focusing on short-term earnings over long-term, value-maximizing goals. From the perspective of an outside investor, how do you view the actions of management executives who are focused on improving earnings over maximizing value ?

. What are the ethical implications of this type of behavior

. How would you realign corporate governance policies or provisions to motivate managers to focus on long-term, value-maximizing goals, rather than short-term stock vale.

Reference no: EM133359211

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