Question 1

The important method of addressing the Agency problem is to write into the rules and procedures of a company, the behaviours which must be followed by the senior managers, in order that the interests of their shareholders are protected.That is what is meant by Corporate Governance.

(i)Explain Agency Theory in the context of Corporate Governance(35 marks)

(ii)Give examples of Irish cases (Outside of the Banking Industry), illustrating theproblems that Agency costs have presented.(15 marks)

Question 2

"In the wake of the demise of Enron, corporate governance has come to the forefront of

economic discussion. The fall of Enron was a direct result of failed corporate governance

and consequently has led to a complete re-evaluation of corporate governance practice in

the United States".-Peter Grosvenor Munzig Department of Economics Stanford University, Stanford CA, 2003.

(i)Set out and review the five main findings ofthe U.S. Senate PermanentSubcommittee on Investigations, with respect to the role of the Enron Board ofDirectors in Enron's collapse and bankruptcy.(25 marks)

(ii)Examine the individual, corporate and systemic issues raised in the Enron case and how these ultimately contributed to Enron's' demise.You will need to discuss the failings of the Audit, Risk and Remuneration Committees in your answer.

(25 marks)

Question 3

(a)Applied ethics deals with issues in private or public life that are matters for ethical judgments.Set out and critically discuss thefourimportant terms used in making moral judgments about particular actions.(30 marks)

(b)Discuss any examples of a corporation which were referred to in class, where in your opinion, moral judgements were incorrectly made.(20 marks)