Corporate Governance by linxiaoqin


									                            Corporate Ethics and Governance
                                      MNO 6220
                               Spring 2012 - (Module A)

Professor Wayne H. Shaw                              Class Time: M 6:30-9:30
Office: 400-A Fincher                      
Phone: 214-768-3053                                  Office Hours: M 4:00 – 5:00
                                                      and by arrangement

Text: Text of the Sarbanes Oxley Act of 2002
      Summary of the Dodd-Frank Wall Street Reform and Consumer Protection Act

Objectives of the course:

This course is designed to create a template for action at every level inside and outside
the organization supporting best practices for an effective Board of Directors. To
complete this primary objective, we will (1) gain an understanding of the structure of the
board, (2) the role of the subcommittees, and (3) learn to understand how to identify
continuing weaknesses in current committee structures.


Below are two contrasting views of a Board of Director’s role in the Governance in a

       “The Shape of Things to Come”

       “The United States is fortunate that a well developed code of commercial law,
       strong and vigilant regulatory agencies, a business oriented culture and powerful
       peer pressures have combined to foster corporate managements which are, on the
       whole, both competent and honest. As widespread public ownership has spread
       stockholders and management ever more widely, managements have provided,
       generally, fully satisfactory stewardship. As a consequence, the role of the Board
       of Directors has become increasingly ceremonial.”

                                     -   Robert Crandall, former CEO, American Airlines

       Corporate governance is defined as “a system of checks and balances between the
       Board of Directors, the management, and investors in companies to produce an
       efficiently-functioning corporation, ideally geared to produce long-term value.”

                   -   Dr. Helmut Sohmen, Chairman, World-Wide Shipping Group Ltd.

       The primary objective of this course is to examine the evolution of corporate
       governance and ethics in the post-Enron environment. We will develop a
       template for “how to do it right” as the role of corporate governance is defined.
       This will be accomplished by looking at the critical stakeholders that need to be in
       balance for the corporation to play an effective role in maximizing profitability
       without minimizing social responsibility.

       For the MBA (MSA) candidate, creating an appreciation of what constitutes
       effective corporate governance and ethical leadership will involve discussions
       with the people who have responsibility for corporate governance and
       responsibility to “do it right.” To achieve this goal, we will hear from various
       players in the corporate governance arena. From these discussions, we will
       attempt to determine what “good” corporate governance means and how to
       recognize weaknesses in a corporate governance system.

Exams and Grading Policy:

   The grade in the course will be determined by class participation (50%) and an exam
   (50%). The information on which the paper is based will be developed in the
   previous class meetings of the module. Incompletes will be given only in accordance
   with University policy. If you need academic accommodations for a disability, you
   must first contact the disability must first be registered with Disability
   Accommodations & Success Strategies (DASS) to verify the disability and to
   establish eligibility for accommodations. Students may call 214-768-1470 or visit to begin the process. Once registered, students
   should then schedule an appointment with the professor to make appropriate
   arrangements. (See University Policy No. 2.4; an attachment describes the DASS
   procedures and relocated office.)

Use of personal computers and outside reading materials in class::
       In the past, a few people have used personal computers during class time for
       purposes other than taking notes (i.e. surfing the net or playing video games) or
       reading materials unrelated to the class during class time. I want to make clear
       my policy related to these activities. First, personal computers can only be used
       during class time to take notes in the class. If not used for this purpose, they must
       be turned off and closed. Second, no unrelated reading materials are to be opened
       during the class. Any student who ignores these policies will automatically be
       given an F grade in the class and be excluded from further participation in the
       class. Computers cannot be used during outside presentations.

Cox School of Business Honor Code
      Students are expected to abide by the Cox School of Business Graduate Honor
      Code which provides in part: Academic integrity is the foundation of the
      educational process at the Cox School of Business and the source of value
      associated with earning a degree from Cox. By becoming members of the Cox
      School of Business, students agree to hold themselves to the highest standard of
      academic integrity and to uphold this Honor Code (“Code”). A Cox School of
      Business student will not lie, cheat, steal, or tolerate those who do. Violations of
      the Honor Code will result in the consequences provided therein.
Course Sessions:
     (Ordering subject to change with availability of speakers)
     1. Defining the Role of the CEO and Board of Directors (January 9)

            We will discuss how to balance the company’s and the Board’s
            responsibilities to Labor, Management, Itself, The Community, and the
            Government (Local, State, and Federal). Criteria for Board membership,
            internal vs. external membership, balance, etc. will be examined in depth.
            Discussion will focus on the role of the Board’s Audit, Compensation, and
            Nominating Committees.

     2. Discussion of the Effect of Recent Legislation on Corporate Governance
        (January 13 - Friday)
           1) In this session, we will review the Sarbanes Oxley Act of 2002 and
               how it might change the traditional view of corporate governance.
           2) Next, we will review relevant sections of the Dodd-Frank Wall Street
               Reform and Consumer Protection Act of 2010.
           Here, the role of the Board will be discussed against the current business
           environment and potential for further regulation.

     3. The Role of the Outside Counsel (January 23)

            In this session, we will hear from a legal expert about the current and
            changing role of both internal and external counsel. We will address
            issues such as the responsibilities of counsel to address weaknesses in the
            process, why the Board of Directors may now need its own legal counsel,
            and what impact recently enacted legislation might have on shareholder

     4. Compensation and the Role of the Board (January 30)

            In this session, we will hear from an expert in compensation on how C-
            Suite compensation is set and other issues related to compensation of
            management. We will also discuss the form and amount of Board member
5. Monitoring Internal Control and Ethics Within the Corporation
   (February 6)

      Issues addressed include who is responsible for responsible for the
      financial statements, the role of the board in determining accuracy of the
      data, the documentation of a company’s internal corporate policies, and
      how the changes in Sarbanes Oxley will impact the timeliness and
      transparency of financial statements. Finally, we will hear from an expert
      on the impact of Sarbanes Oxley on internal control issues.

6. Communication Between the Board and Management (February 13)

      In this session, we will examine the relationship of management with the
      Board. We will hear from a CFO of a Dallas firm on how they provide
      information to the Board and how they and the Board separate their duties
      of oversight and “running” the company.

7. The Use of Financial Statements to Identify “Red Flags” (February 20)

      In this session, we will discuss the issues that have led to failures in the
      financial accounting and reporting processes of publicly traded firms. We
      will test our knowledge of our abilities to recognize the warning signs
      before they manifest into a required restatement by reviewing a filing by a
      public company.

8. Examination (February 27)


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