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Behavioral Finance In Corporate Governance Independent Directors And Non-Executive Chairs, And The Importance Of The Devils Advocate - Essay Example

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Summary
• Peer concerns may disrupt loyalty and encourage others board members to also disagree.
• CEO from certain meetings since that would encourage disobedience that offers objective assessment of company…
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Behavioral Finance In Corporate Governance Independent Directors And Non-Executive Chairs, And The Importance Of The Devils Advocate
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"Behavioral Finance In Corporate Governance Independent Directors And Non-Executive Chairs, And The Importance Of The Devils Advocate"

Download file to see previous pages Introduction
• many employees sacrifice their careers and reputation because of loyalty to their CEO
• Loyalty is misused through misplaced loyalty in certain organizations.
Milgram experiment
• Milgram experiment test innate loyalty through psychology experiment.
• psychological attributes of the respondents was testing in mock experiment
• subjects were made to electrocute stranger contrary to their own beliefs

Leadership and corporate governance
• Modern liberal corporate governance calls for different professionals in leadership restrained by laws and rules.
• The leaders are given different authorities to run organizations.
• The CEO have are appointed by the Board of the organization
• The boards remain loyal even to CEOs that are misguided.
• Many boards detest disagreeing with CEO they feel that would be perceived as disloyalty.
Dissenting peers and conflicting authorities
• The Milgram experiment explains how people dissent peers and conflict authority.
• Cases of dissenting peers voice their concerns; the subjects reduce their loyalty levels to the authority. ...Download file to see next pagesRead More
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