1. Chapter 34 Principles PrinciplesofCorporateFinance Ninth Edition Governance and Corporate Control Around The World Slides by Matthew Will Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw Hill/Irwin

2. 34- 2 Topics Covered  Financial Markets and Institutions  Ownership, Control and Governance  Do These Differences Matter

3. 34- 3 Financial Claims Percent The value of the financial claims on firms in 2003 as a percentage of GDP.

4. 34- 4 Financial Claims Percent Household Portfolio Allocation (1995-2002) as a percentage of GDP

5. 34- 5 Financial Claims Percent Financial Institution Portfolio Allocation (1995-2002) as a percentage of GDP

6. 34- 6 Financial Claims Percent Non-Financial Corporations’ Portfolio Allocation (1995-2002) as a percentage of GDP

7. 34- 7 Japanese Bank Ownership Sumitomo Corporation Sumitomo Trust Sumitomo Bank 1.9% 4.3% 4.4% 1.8% 2.2%

8. 34- 8 Cross Holdings The cross-holdings of common stock between 6 companies in the Sumitomo Group as of 2000. Listed are the ownership as a percentage of outstanding shares.

9. 34- 9 Ownership of Daimler Benz Deutsch Bank Kuwait Government Mercedes Automobil Holding AG Widely Held Stern Auto Beteilig… Stella Automobil Beteiligungsges Widely Held Bayerishe Landesbank Robert BoschKomet Automobil Beteiligungsges Dresdner Bank 25% 25%25%25% 25% 25% 50% 28.3% 14%25.23% 32.37% Daimler Benz AG

10. 34- 10 European BOD  Codetermination  Aufsichtsrat  Vorstand  Counseil du surveillance  Directoire

11. 34- 11 Asian Ownership The ownership of firms in Asia is held by a small number of very wealthy families.

12. 34- 12 ABB Sweden Wallenberg Family Investor Shares 5.7% Votes 7.4% Shares 23.4% Votes 41.2% Shares 24.3% Votes 32.8% Shares 27.1% Votes 35.7% The pyramid that controls ABB, one of Sweden’s largest companies.

13. 34- 13 Voting Control The value of control-block votes as a proportion of the total firm value.