Scenario:

Starting a company. My product is a software platform that integrates a wide range of media devices, including laptop computers, desktop computers, digital video recorders, and cell phones. My initial market is the student body at your university. At some point, hopefully sooner rather than later, I plan to go public with an IPO and then to buy a yacht and take off for the South Pacific. With these issues in mind, I need to answer for yourself, and potential investors, the following questions:

1. Suppose your company is very successful and you cash out most of your stock and turn the company over to an elected board of directors. Neither you nor any other stockholders own a controlling interest (this is the situation at most public companies). List six potential managerial behaviors that can harm a firms value.

2. What is corporate governance? List five corporate governance provisions that are internal to a firm and are under its control.