In 2007, the Corporate Governance has been a well discussed topic in the business press. Newspapers produced detailed accounts of corporate fraud, accounting scandals, excessive compensation and other perceived organizational error many of which culminated in lawsuits, resignations, and bankruptcy. At the center of these stories was the assumption that somehow corporate governance was to blame. That said, it was a functional disorder in the system of checks and balances established to prevent abuse, b … Read more »

In 2007, the Corporate Governance has been a well discussed topic in the business press. Newspapers produced detailed accounts of corporate fraud, accounting scandals, excessive compensation and other perceived organizational error many of which culminated in lawsuits, resignations, and bankruptcy. At the center of these stories was the assumption that somehow corporate governance was to blame. That said, it was a functional disorder in the system of checks and balances built in to prevent the abuse by managers. This case explores the various corporate governance systems that have been adopted in the U.S. and in various countries in Europe and Asia. The questions of control, director independence, independence of the auditor, dual board compared to single integrated structure, comply-or-explain and legislative procedures against market-driven solutions explored. Readers are asked to judge what governance systems or elements that they consider most effective. Plenty of examples – including Johnson & Johnson, BMW, Michelin, Heineken, Toyota, Samsung, Posco, PetroChina, Infosys and many others – are consistently used as an illustration
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from
David F. Larcker,
Brian Tayan
Source: Stanford Graduate School of Business
33 pages.
Release Date: 15, January 2008. Prod #: CG11-PDF-ENG
Models of corporate governance: Who is the fairest of them all? HBR case solution