SCHOOL OF BANKING AND FINANCE Term 2 2022 FINAL EXAMINATION QUESTION PAPER FINS3626: INTERNATIONAL CORPORATE GOVERNANCE INSTRUCTIONS 1. Time Allowed – 9am to 5pm (Sydney Time) Wednesday 17th August 2022 2. This question paper is released on Moodle at 9am and answers are to be submitted by 5pm. It is expected that you should be able to complete this paper within 2 hours. 2. This is an open-book exam: it is not necessary or expected that you do research outside the Course material. 3. This exam represents 50% of your final composite mark for this Course. 4. Total marks available – 50 marks 5. This question paper has 3 pages including this cover page. 6. You must answer all 4 questions – marks available and word limit for each question are clearly shown on the following pages. Students are advised to read the questions before attempting to answer the questions. 7. Answers to all questions must be typed, within the word limit, in a word document: Times New Roman (or equivalent) Font 12 or larger, double-spaced, and with margins of at least 2.5cm all sides. 8. The word document comprising your answers must be submitted to Turnitin via Moodle by 5pm (Sydney Time) today (17th August 2022) 9. You will only be able to make one submission – late submissions will not be accepted This exam cannot be copied, forwarded, or shared in any way Students are reminded of the UNSW rules regarding academic integrity and plagiarism Page 2 of 3 Question 1 (Word limit: 300 words) The market for mergers and acquisitions is said to provide an “external governance mechanism”. Do you agree or disagree with the notion of such external mechanisms To what extent do you believe they can be as effective as formal / internal mechanisms (such as the Board of Directors, the inclusion of independent non-executive directors, and formal Board monitoring) Cite examples from your research or observation where possible. (10 marks) Question 2 (Word limit: 300 words) While the “one-share, one-vote” principle attempts to deal with manifestations of the principal-agent problem where equity holders and voting shareholders have differing interests and can therefore vote democratically, other structures can exist. Do you believe that organisations with “super voting” shares have merit from a corporate governance perspective How does this impact on the ability of other shareholders to play a role in monitoring their investee organisation(s) (10 marks) Page 3 of 3 Question 3 (Word limit: 500 words) Risk Management approaches including the Three Lines of Defence (3LoD) and ISO 31000:2018 Risk Management serve to provide consistent frameworks or approaches toward risk management and the manner in which risks are governed by organisations around the world, particularly those that are represented in multiple countries globally. (a) What risk management frameworks or approaches do you think are useful for identifying, measuring, monitoring, and managing risk in an organisation (b) Provide an overview of the advantages and disadvantages of one (1) risk management framework or governance approach of your choice. You may choose to contextualise this in a specific firm or industry to ground your response practically. (c) Create a list of agenda items to identify what a Board of Directors should regularly pay attention to within their Risk Committee. You do NOT need to create any detail under each item, but it would be helpful to explain / justify the choices you have included. (15 marks) Question 4 (Word limit: 500 words) Many jurisdictions (e.g., Germany) require companies to include employee and other stakeholder representation on their Board. The Reserve Bank of Australia (RBA) is reviewing its Board composition in 2022 to consider the perspectives of non-economists in the making of monetary policy decisions. (a) What merits exist in appointing customers or suppliers to the Board of an organisation (whether it be for-profit or otherwise) (b) Describe and explain three (3) challenges in representing the best interests of other stakeholders of the firm when doing so. Provide support for your answer. (c) Some argue that shareholder interests are more important than stakeholder interests. Why do you think this is often the case Justify your position citing examples from cases or theory, where appropriate. (15 marks) END OF THE FINAL EXAM QUESTION PAPER
