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Governance and Risk in Finance, Term Project 1
Finance & Accounting
Pages 9 (2259 words)
GOVERNANCE AND RISK IN FINANCE Table of Contents Abstract 3 Content 4 Introduction 4 Purpose of study 5 Rationale 6 Issues 6 Method 7 Discussion and Analysis 8 Event of a hostile takeover of Oracle vs. PeopleSoft 8 Corporate governance of Russia 9 Corporate governance of UK 9 Conclusion 11 Bibliography 13 Abstract Corporate Governance is necessary to be followed inside an organization to ensure good performance, having proper accountability to all stakeholders and mitigating any conflicts of interest.
The macro risk factors can be political, economical, social and technological factors called PEST analysis. The macro economic variables generating macro risks are price indexes, exchange rates, commodity prices, variables of monetary policy etc. However, there are certain credit rating agencies who give credit rating to institutions from excellent to poor like A.M.Best, Dun & Bradstreet, Standard & Poor’s, Moody’s, and Fitch Ratings. The Standard & Poor gives rating scale ranging from AAA to BBB to CCC to D. Rating lower than BBB- is considered as junk or speculative bond. Sound corporate governance enables organizations to control risk beforehand. Hostile takeovers are often seen as from governance point of view as the threat of takeover is believed to exert pressure on managers to act protecting the interest of shareholders. ...
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