CFA L1 / Corporate / M3. Governance
Module 3 · Corporate Issuers

Corporate Governance: Conflicts, Mechanisms, Risks & Benefits

EN: Governance mechanisms, ESG factors, and the consequences of weak governance.
VN: Cơ chế quản trị, ESG, hậu quả của quản trị yếu.

1. Governance Mechanisms Concept

About: Independent directors, separated CEO/Chair, independent committees (audit/comp/nominating), one-share-one-vote, performance-based comp with claw-backs. Best-practice toolkit.Tóm tắt: Thành viên độc lập, tách CEO/Chair, ủy ban độc lập, 1 cổ phiếu 1 phiếu, lương gắn hiệu suất.

Board structure

  • Indep. directors Reduces management dominance.
  • Sep. CEO/Chair Best practice — non-executive chair.
  • Committees Audit, compensation, nominating — should be independent-led.
  • Voting One-share-one-vote vs dual-class shares.
  • Comp align. Stock-based pay, claw-back provisions.

2. ESG Factors Concept

About: E (environment), S (social), G (governance). Increasingly material to risk and return; disclosure now required by major regulators.Tóm tắt: ESG. Ngày càng quan trọng cho rủi ro và lợi nhuận. Công bố bắt buộc tại nhiều thị trường.
  • E Environmental — carbon footprint, resource use, pollution.
  • S Social — labor practices, product safety, community.
  • G Governance — board, exec pay, audit, shareholder rights.

3. ESG Investing Approaches Concept

About: Five approaches: negative screening (exclude), positive (best-in-class), thematic (climate/water), engagement (active dialog), impact (measurable outcomes).Tóm tắt: 5 cách: negative, positive, thematic, engagement, impact.
  • Negative screening Exclude sin stocks (tobacco, weapons).
  • Positive screening Best-in-class within sector.
  • Thematic Climate, water, gender.
  • Engagement Active dialog/voting to push change.
  • Impact Direct measurable social/environmental outcomes.

Practice problem Practice

Practice problem

An ESG manager refuses to invest in any tobacco or weapons company. Which screening approach?

Show solution
Negative screening = exclude entire categories.
Positive = best-in-class within sector.
Thematic = invest based on themes (climate).
Negative (exclusionary) screening