CorporateGovernanceandtheValueofFirms--SomeExperiencesofU.SandAsiaProfileofProf.K.C.JohnWeiValuecreationandbusinessstrategiesValuecreationviafinancialstrategiesHowtovalueafirmHowtoenhancethevalueofafirmValueDriversSourcesofabnormalprofitAbnormalprofit:Motorola,EricssonandNokiaEarningsqualityCorporateGovernanceRecentcorporategovernanceproblemsintheU.S.CharacteristicsofAsianCompaniesWhyiscorporategovernanceimportant?Whatiscorporategovernance?Whyisitneeded?GoodgovernancepracticeWhyValueValue?JapaninMid-1980s:WeareNumberOneJapanNow:WeareinProlongRecessionNikkei225vs.Dow:January1984-June2003NotEveryThingisEqual:SonyisDifferentToyotaMotorisalsoDifferentButNissanisthesameuntilRecentlyRenault’s44.4%purchaseinMarch1999makesNissandifferentsinceValue-BasedManagementMakestheDifferencesWhatistheDecisionRuleforVBM?WhatistheValueofaFirm?Shareholder-OrientedEconomiesPerformBetterShareholder-OrientedFirmsBenefitAllShareholder-OrientedFirmsBenefitAll(con’t)Casestudies(HBR)Casestudies(HBR)RestructuringCompaniesTheValueManagerTheProcessofBecomingValue-OrientedWhenareCompaniesinNeedofRestructuring?RestructuringProcessRestructuringFrameworkRestructuringFramework:ExampleImproveOperations:InternalImprovementsRethinkyourportfolioofbusinesses:ExternalImprovementsOwnershipAlternatives:ExternalImprovementsFinancialEngineeringSourcesofRestructuringValuePuttheValueCreationPlanintoActionSummaryforRestructuringApproachestoValuationDiscountedCashFlow(DCF)ValuationMeasuringValueDiscountedCashFlowModelFreeCashFlow-DefinitionDCFValuationSensitivityanalysisFundamentalDriversofaCompany’sValueBasicsofValueCreationValueCreationTheReturnSpreadValueMetricsValueDriverAnalysisROICTreeMergersandAcquisitionsIdentifyingValueCreationPossibilitiesEvidenceonValueCreationinM&ATransactionsReasonsForFailuresValueCreationorEnhancementValueEnhancement:SummaryValueEnhancement:SummaryValueCreation:ConclusionValueCreationChartStrategicManagementviaValuationPossibleLinksDiversificationdiscountorpremiumInvestmentvs.Dis-inves