shefrin行为公司金融课件Chap09.ppt

Chapter 9 GROUP PROCESS Behavioral Corporate Finance by Hersh Shefrin Three Features About Group Behavior Accuracy: Groups outperform individuals in intellectual tasks, but not judgmental tasks. Polarization: Groups become polarized in respect to risk tolerance. Unwarranted Acceptance: Group discussion leads members of a group to accept a decision readily. illusion of effectiveness General Reasons for Group Errors Three main factors that underlie group inaccuracy and unwarranted acceptance. groupthink poor information sharing inadequate motivation Enrons Board and Special Purpose Entities CFO Fastow and aide Michael Kopper used special purpose entities to enrich themselves at the expense of Enron’s shareholders. Enron’s board approved use of special purpose entities to obscure failure of its investments through off-balance sheet items. Board waived Enron’s code of ethics for CFO Fastow, allowing him to gain financially from leading the partnership. Board Looked Good on Paper Were there not enough independent directors on Enrons board? Enron’s board complied with conventional corporate governance standards. The majority of its board was indeed made up of independent directors. Board had an independent nominating committee. Audit committee chaired by financial expert. Groupthink at Enron Enrons directors asked few questions, readily accepted answers they received, and cast no dissenting votes. Established no mechanisms to monitor for conflicts of interest on the part of Enron’s CFO. Did not ask to see the partnership prospectus material that identified the conflict. Contrasting EnronsROE and Free Cash Flows WorldCom CEO Bernard Ebbers borrowed $253 million to acquire land, yachts, and boatyards. Collateral was WorldCom stock. When the stock price fell and bank required more collateral, WorldComs board approved a loan to Ebbers instead of asking him to sell some his personal assets. PSINet Both WorldCom and PSINet grew quickly by using debt-financed