1. 1 Czech archetype of a corporate crook He manages other people’s money. What sort of bad things can he do? ?

2. 2 Viktor’s choice MANAGE THE COMPANY WELL AND HONESTLY MANAGE THE COMPANY BADLY BUT HONESTLY STEAL FROM THE COMPANY/SHAREHOLDERS XYZ Theoretically achievable value of a company

3. 3 How to tame the bad guy? STEALING FROM THE COMPANY/SHAREHOLDERS Legal Rules  No stealing  Duty of loyalty  Corporate opportunity  Duty of care  Civil Liability  Criminal Liability Corporate Governance  Board composition  Independent directors  Board committees  Code of ethics  Disclosure  Audit  Takeover threat  Loss of job MANAGING THE COMPANY BADLY

4. 4 Corporate Governance dashboard – Pfizer example Board of Directors Information (selection only)2007 Type of BoardUnitary Board Size of Board14 Average Age of Directors63 Separate Chairman & CEONo Number of Independent Directors12 Lead Independent DirectorYes Independent Directors Hold Meetings Without Management PresentYes Annual Equity Grant to Non-Employee DirectorsYes Annual Review of Independence of BoardYes Independent Audit CommitteeYes Independent Compensation CommitteeYes Independent Corporate Governance CommitteeYes Number of Board Meetings Held or Scheduled9 Annual Board ElectionsYes Code of EthicsYes