Company-level ESG risk evaluation CFA Flashcards - Medical Study Cards
Master Company-level ESG risk evaluation with Oncourse flashcards. These spaced repetition flashcards are designed for medical students preparing for NEET PG, USMLE Step 1, USMLE Step 2, MBBS exams, and other medical licensing examinations.
Company-level ESG risk evaluation Flashcard Deck - 8 Cards
Flashcard 1: ESG considerations for equity analysis
Answer: - focus on upside & downside
Flashcard 2: Board committees - best practices
Answer: focus on if key committees (financial reporting, management selection & comp) are independent
Flashcard 3: Classes of shareholder voting rights
Answer: - single class: equal voting rights
- dual-class: shares held by mgmt or founders have more power than external
Flashcard 4: Consequences of ineffective corporate governance
Answer: - damage to reputation
- difficulty competiting
- low or volatile stock price
- higher borrowing costs
- decreased profitability
Flashcard 5: When is a Board of Directors considered independent?
Answer: - no member has significant remuneration, ownership or employment relationship with the firm
- important in countries with dispersed ownership where principal-agent conflict is greater
Flashcard 6: Dispersed ownership & concentrated voting power - conflicts
Answer: - majority of company shares not owned by controling shareholders (strong) but they gain control over other minority shareholders through pyramid structures or dual-class shares, despite having less-than-majority ownership
- principal-principal conflict is likely
Flashcard 7: Dispersed ownership & dispersed voting power - conflicts
Answer: - shareholders (weak) have no power over managers (strong)
- principal-agent conflict is likely, mitigated by presence of controlling shareholders
Flashcard 8: Concentrated ownership & concentrated voting power - conflicts
Answer: - shareholders (strong) have power over minority shareholders & managers (weak)
- shareholders control Board of directors
- principal-principal conflict is likely: controlling owners take advantage of firm resources to detriment of minority owners
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