For each question, there should be a brief introduction, the body of the answer and a conclusion section. Students are expected to write clearly and concisely, with appropriate in-text citation and references provided (Harvard system). Question 1 Explain what is meant by the term “corporate governance”. In 2015, an emissions scandal involving Volkswagen unfolded. Based on your knowledge of corporate finance, critically assess what has happened to the value and performance of Volkswagen since the emissions scandal was uncovered. Why do you believe the value has changed and what impact this might have on the corporate governance policies of Volkswagen going forward? How can Volkswagen mitigate the risk of events such as this one occurring in the future? (~800 Words) Question 2 An investor is convinced that a corporation has a potential competitive advantage in its market sector and a capacity to realize this advantage. Nevertheless, she is concerned that corporate management may choose to pursue a less risky strategy and not to fully realize the potential of the firm. Discuss the difficulty faced by this investor. Are you aware of any arrangements which might better align the interests of this investor and management? Describe and evaluate such arrangements. (~250 - 300 Words)

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