The Singapore Academy of Corporate Management presents certified Lectures-Seminars "Corporate Governance" from Professor SACM, Doctor of Business Administration Vitaly Alfredovich Korolev. The lectures are a unique educational product and are offered for corporate directors who are responsible for the interests of owners and company leaders. The content of the lectures covers part of the SACM Doctor of Business Administration Corporate Governance program, the development of which will allow graduates to work in high positions in organizations of the modern economy, using the most effective management competencies.
The owner and his role.
First, we figure out what the figure of the Business Owner is. What roles does he perform? What is the “royal affair” of the Business Owner? What questions in business can and, what is important, should only he solve himself, without delegating to management? Why there can be no competitive business without the Owner, incl. state? Why is the Owner, who is the source of key opportunities for his business, also the source of his key risks? Why should the Business, in this case, have a Key Risk Management Mechanism, and therefore a “Owner Management” mechanism, and not just the other way around? How should this mechanism be arranged? Why should the Owner be responsible and what should be the type of authority that he establishes in his Company? What type of control should correspond to this type of power? What behavior of the Owner will make his business "top-attractive", ie attractive to top managers? What is the difference between the roles of "Capitalist", "Manager" and "Entrepreneur", which one way or another has to be performed by the Owner in managing his business? How to distribute your time between them? Which one will take the most time? How do you estimate the value of the time that the Owner spends on each of these roles? What does it mean to be an “effective owner”? Not just owning an efficient business, but also owning an efficient one. How can this be achieved? How do you measure efficiency? When is it time to "move away from operational management" and where to start? How to prepare a company for "management succession" associated with the transition of a founder or co-owner from operational management to strategic management? All of the above referred to the figure of the Owner and his time, which he invests in the business. But there is one more question that does not arise for the shareholders of public corporations, and therefore classical corporate governance does not provide an answer.
Over the years, we will surely face the question: "who will continue my business?" "Will my business survive me?" This is the question of Ownership succession. In our society, there is no experience in solving this issue, since business, basically, was created in the first generation and therefore has an "orphan" character. The vast majority of business owners did not inherit it and therefore are unlikely to be able to teach their children how to master and develop a business. But, in addition to training a successor in the family, it will also be necessary to prepare the Company itself for ownership succession, including partners, top managers, and even employees. If the Owner does not pay the necessary attention to the issue of ownership succession, then he can put even a very successful and efficient business at very serious risks.
CONTENT AND DURATION OF LECTURES
Many people think that corporate governance is about the work of the boards of directors in large public companies, since these are the real corporations. This is twice wrong. The first myth: corporations are any business society, any LLC. And the principles of "ownership management" are similar for a small LLC and for the largest public JSC. Corporate governance is independent of the size of the business. It is found in any company in which the Owner can be different from the Manager, in which Ownership and Management can be separated. The second myth is about the board of directors. Corporate governance exists even in companies where there are no other governing bodies other than the meeting of members and the CEO. Collegiate bodies are additional elements, but not necessary features of corporate governance. In the course, we analyze in detail various collegial bodies and answer the question of where to start the development of corporate governance: from the board of directors or from the board, as a body uniting the top management team? The answer is ambiguous and unique for each company. And each company gives this answer in the document - "Concept of setting / developing corporate governance", the content of which we are also talking about in the course. At the end of the course, business owners or top managers will be able to answer the question of what kind of corporate governance system their company needs and what step to start with.
1. Corporate governance as a tool for an effective owner
The first block of the lecture-seminar "Corporate Governance" of the Singapore Academy of Corporate Management and the British Academy of Business. The lecture is an introduction to the topic of Corporate Governance as a tool for an effective owner and briefly talks about the program, its structure and the target audience to which it is dedicated. During the lecture, the basic concepts of the subject will be considered and the first important questions of the course will be touched upon. Who is an owner, what does it mean to be an effective owner, why does the owner of a company or business need corporate governance? How is corporate governance different from corporate management and why are these concepts often confused? Why is it not enough to own an effective business to be an effective owner? What is an owner calculator?
Duration 26 minutes.
2. Corporate governance: the owner and its stakeholders
The second block tells about the owner and his stakeholders. The first part discusses the question of who the stakeholders are, who can be considered a stakeholder of the owner, and by what criteria a stakeholder can be identified. We will also talk about the importance of the owner's awareness of his “wants” (goals, values, interests) and how this will help to distinguish opportunities from temptation. Why is opportunity a means to achieve the goals of the owner (entrepreneur), and temptation is a quasi-goal? If the owner is a source of key management capabilities, then it is also a source of key risks. Does the owner need mechanisms for managing key risks and what are they? Why the charter is not only a formally legal document, but also an important management tool.
Duration 25 minutes.
3. Corporate governance: continuity
The third block is devoted to continuity and problems that are associated with different types of continuity. The analysis of the basic concepts of the course continues: continuity, as well as its types, managerial and owner continuity. Four main problems of continuity or four types of "schizoid" (role conflicts or ambivalence - for those who like terminology) that the owner may face are considered. The problem is viewed both through the prism of managerial and ownership succession. What questions can arise in a company where the owner and manager are one person? What is an accountability crisis and why can there be a double shock of losing a leader? What contradictions may arise between partners and how can continuity work in a generic business? Who evaluates the activities of the owner? Why is the principle of “responsible market” a key core of corporate governance in an entrepreneurial company and can create a sense that the entrepreneur is in control of the future?
Duration 23 minutes.
4. Classical corporate governance in the eyes of an entrepreneur
The fourth block tells about the corporate governance code of the Russian Federation and the definition of corporate governance in it. The reasons for the need to familiarize themselves with the Corporate Governance Code are analyzed, including why this is a necessary document not only for JSCs, but also for LLCs. The responsibility of authorized persons is considered, as well as the management bodies of the company, in particular the supreme management body (meeting of owners). An answer is given to what the interests of the company are and why the interests of the company are fixed in the decisions of its management bodies. It is also about what the owner's knowledge map is.
Duration 19 minutes.
5. Corporate governance: about an effective owner
The fifth block of the lecture-seminar examines in more depth the concept of an effective owner. Is the state always an ineffective owner? When the state competes with private business, it can have competitive enterprises. Should the state own enterprises if the risks are borne not by the owner (not by an individual or by an official), but by all citizens? The state must justify its ownership of the company and the reason cannot be commercial activity. Why are there so many unprofitable state-owned companies? Methods of measuring the effectiveness and efficiency of the company and the owner are considered, as well as the economic conditions under which it is advisable for a large owner to engage in charity.
Duration 28 minutes.
6. Corporate governance: a case of ownership efficiency
A case study about ownership efficiency. The sixth block of the lecture-seminar examines an example of ownership efficiency from the practice of Vitaly Korolev. We are also talking about how important it is for the owner to understand what the business is for him: a life strategy or a means for the implementation of other goals and projects. The role of the owner is considered: managerial, controlling, entrepreneurial, strategic on the example of the “taxi” model in corporate governance. Parallels are drawn between the participants in the movement and the possible roles of the owner in the company: who is the “driver”, “navigator”, “active” or “passive passenger” (“fellow traveler”). The block leads the audience to the conclusion that it is important for the owner's self-determination to formalize his place in the company.
Duration 25 minutes.
7. Corporate governance: the entrepreneur's "calculator"
The seventh block is devoted to the entrepreneur's “calculator” as a way to “come to an agreement with oneself”. The calculator helps the entrepreneur make a choice: to increase his efficiency as an owner or to increase the efficiency of the company? The following questions are discussed: at what point does it make sense to separate the functions of the owner and the manager, what is the required return on capital and what should the entrepreneur's time be spent on. Different roles of the owner are considered according to the model of the “three-headed dragon”: one head is a top manager, another head is a capitalist, and the third head is an entrepreneur. In conclusion, the “gamut” of the owner's time allocation is presented in order to gradually reduce the burden (working time) of the owner.
Duration 36 minutes.
8. Corporate Governance: Ownership Succession
The eighth block of the lecture-seminar is devoted to the topic of continuity and the role of corporate governance in it. The block answers the questions: why a private company with the departure of the owner can lose about 30 percent in value? Who should be the first to start talking about the death of the owner, and why should this conversation be as common as talking about lunch? What four ways does an owner have to resolve the issue of succession? What "crossroads" is the Russian "orphan business" facing?
Duration 34 minutes.
9. Corporate Governance: Owner and Types of Power
In the ninth block of the lecture-seminar on corporate governance, the types of owner power and the key principle on which these types are based are analyzed. The main criterion for the classification of power is whether or not the owner adheres to the principle of “market responsibility” (BO). Bazaar responsibility is understood as the ability of the owner to follow the rules set by him. The types of power are divided into “presidential” and “monarchic”, which, in turn, is subdivided into “constitutional” and “autocratic”. It is noted that the autocratic type of power has no successive prospects, since it does not require compliance with the “BO” principle. The types of power correspond to the types of control: symmetrical and asymmetric. The first one corresponds to the BO principle, the second one does not. The lecture discusses the need for a control body in the company, which monitors the owner's compliance with the rules established by him. An independent director on the board of directors can also play this role. It discusses what it means to work “not for the uncle, but for the idea for which the uncle works”, as well as what it means “top-attractiveness” and what makes the company “top-attractive”. How does a “top management team” differ from a “top performing retinue”?
Duration 25 minutes.
10. Corporate governance: a departure from the operating system and questions to the owner
The first step to moving away from the operating system and 19 questions to the Owner The tenth block summarizes the previous lectures and presents to the audience a set of questions for self-determination to the owner. Questions on self-determination of the owner are divided into four groups: the owner and his business, the owner and his management, the owner, his family and clan, the owner alone with himself. Variants of scenarios for separating operational management from proprietary management are considered. First: search for a manager to replace the owner without creating collegial bodies. Second: the owner creates a board of directors and becomes its chairman, but a collegial management body is not created. The third option: a collegial management body is created, the owner becomes its chairman. In this block, viewers will learn what the company's “stationery set” is and why the owner needs “four pens with different nibs”?
Duration 30 minutes.
11. Corporate governance: how many corporations are there in Russia?
The eleventh block of the lecture-seminar on corporate governance is devoted to the analysis of the concept of a corporation and existing types of business. The presence of corporations in Russia depends on which definition of a corporation is used. Depending on this, there are either no corporations in Russia, or any business entity is a corporation. Why study corporate governance in Russia if there is not a single classic corporation in Russia? And how does corporate governance change with the types of business to which it applies? The classification of the structure of business ownership is considered: type “A” - sole proprietorship, type “B” - owner with a controlling stake and minority shareholders, type “C” - partnership and family business, type “D” - dispersed ownership.
Duration 28 minutes.
12. Corporate governance: the agency problem
The agency problem as a "source" of corporate governance. In the twelfth block, the analysis of the agency problem begins, which is the basis for the existence of corporate governance as a discipline. The lecture begins with an analysis of the conceptual apparatus, since borrowed terms from the English language differ from the accepted Russian equivalents. Governance - the system of power, the rules of the game, directing - the determination of the main directions, Control - the requirement of accountability, control of key risks, Administration - the management of the bureaucratic structure The block answers the questions: what is a principal-agency relationship? Why is the classic “leadership” scheme not applicable to the interpretation of the owner-manager relationship? Is there a definitive solution to the agency problem? Management is like a “play” activity. The difference between subordination and accountability.
Duration 32 minutes.
13. Information asymmetry and the rules of corporate games
Information asymmetry and the rules of corporate games. In the thirteenth block, the discussion of the agency problem continues. In the previous block of the lecture-seminar, principal-agent relations, the agency problem and its costs, as well as possible ways of solving it, were considered. This block discusses the following questions: why is the company the principal for the manager? Can board members be agents? What are fiduciary responsibilities and who is the ultimate beneficiary? It addresses four difficult questions of the agency problem and why we need rules of the game, “rules of the game” and “tournament rules”. What is the purpose and difference?
Duration 32 minutes.
14. Corporate governance through the prism of company bodies
The fourteenth block examines corporate governance through the prism of the company's bodies. Abbreviations of terms are defined. The legislative restrictions of the governing bodies and their properties are discussed. An answer is given to what the rhythm of the controls is and why the rhythm of different collegial bodies cannot be the same. The discipline of management bodies and the planning of their work are examined.
Duration 28 minutes.
15. Corporate governance: supreme governing body (meeting of participants)
The supreme governing body (meeting of participants). Legal aspect. In the fifteenth block, the legal aspects of the management bodies of companies begin to be sorted out. Differences between corporation bodies according to the civil code of the Russian Federation are considered. The supreme governing body (HEI) is examined in detail: by whom the body is formed, who is the chairman, the number of the body and its competence.
Duration 26 minutes.
16. Corporate Governance: Board of Directors
Board of Directors. Legal aspect. In the sixteenth block of the lecture-seminar on corporate governance, the analysis of the legal aspects of the company's bodies continues. This block is devoted to the board of directors (BoD). Understands what a board of directors is and its main features in accordance with the Civil Code of the Russian Federation and the law on joint stock companies. The difference in the procedure for forming the board of directors in JSC and LLC, as well as 10 main tasks of the board of directors is considered.
Duration 27 minutes.
17. Corporate governance: the board as a top management team
The board as a top management team. Legal aspect. The seventeenth block is devoted to the analysis of the legal aspect of the collegial executive body. The difference between the concept of government in Russia and the legislation of Western countries is considered, as well as the tasks of government in accordance with Russian legislation. The block answers the questions: what is the principle of “divide and conquer”? What is the criterion of a governing body: the speed of decision making or the implementation of decisions? Advantages and disadvantages of a collegial executive body.
Duration 30 minutes.
18. Corporate Governance: Advisory Bodies and "Quasi-Bodies"
Advisory bodies and "quasi-bodies" for the transition period. In the eighteenth block, the discussion of the company's collegial bodies continues. Comparative characteristics of collegial bodies are given. The discussion discusses what principles are used to form the committees under the board of directors and the management board, what are the “three pillars” of corporate governance. What are “quasi-organs” and why are they useful for the “transition period” to full-fledged organs.
Duration 25 minutes.
19. Modeling the concept of corporate governance of the company
Modeling the concept of corporate governance of the company. The nineteenth block is the final part of the lecture-seminar on corporate governance. Modeling the corporate governance system in a company or group of companies. What does it mean to model corporate governance at the company (group) level and what are the requirements for the corporate governance concept?
Duration 24 minutes.
Lectures (course) are addressed to company owners who sometimes think about the following questions:
1. Do I spend too much time on the operational management of my company? Am I missing a strategic perspective?
2. I solved the first issue and turned over the day-to-day management to the managers, but I am not satisfied with the results and still feel uneasy about the fate of my business. Can I entrust managers with his fate? Are they ready to take responsibility for it? Will I lose control?
3. As an owner, I am happy with the way management works, led by a hired CEO. But I'm worried that the company will suffer significant damage if he and his team decide to leave the company. How to build a management system in which the change of CEO would be seamless, without shocks?
4. My partners and I own a business and have built a management system that allows us not to get bogged down in current issues and at the same time control management. Among our partners, we have complete mutual understanding, except for the "small differences on the mission." How do we reconcile disagreements about business development prospects?
5. I founded a company and built a management system that suits me and a team of top managers. But I am not eternal and would like the business to continue to develop even if I decide to retire. How can I ensure this? How to prepare a company for a change of ownership? How to prepare a potential successor?
6. I am a potential successor to a business founder. But how can I prove my worth? How to Prepare for Leadership? What do I need to develop in myself to take responsibility for business continuity? How do you earn the trust of the founder and his top management team?