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MKT 382_Corporate Governance_Cunningham


									                                CORPORATE GOVERNANCE
          (MKT 382-UNIQUE #04960, MAN 385-UNIQUE #04465, LAW 354D-UNIQUE #27975)
                                       SPRING 2008


William H. Cunningham
James L. Bayless Chair for Free Enterprise
Address: HRC 3.358
Office Phone: 232-7540
Office Hours: T, TH 9:30-10:30 a.m. and by appointment

Teaching Assistant

Kate Doty (e-mail:

Class Schedule

The class will meet on Thursdays at 3:30 p.m. in GSB 3.138.

Course Objectives

The first objective of the course will be to help prepare future corporate and non-profit Directors to fulfill their
fiduciary duties of care and loyalty to the organizations that they will serve. We will do this by examining a
wide variety of issues that Directors must deal with on a regular basis. These include balancing efforts between
establishing quarterly and yearly performance targets and building strong companies that can sustain above-
market financial performance in the future. Directors must also manage business and political relationships,
initiate and integrate acquisitions, create/change corporate culture, continually align the organization structure
to the business strategy, allocate resources for a variety of corporate initiatives, deal with issues of corporate
governance, succession planning, executive compensation, and learn to navigate through potential public
relations disasters. We will examine as many of these topics as time permits.

The second objective of this course will be to understand the nature and scope of corporate Boards from the
perspective of society, social and economic interest and what can be done to prevent some of the more
publicized corporate governance failures. We will examine several of the more highly publicized corporate
failures as well as what action Congress has taken to address corporate malfeasance, and the recommendations
that have been made by social critics.

Leadership and Career Focus

The course is directed primarily at graduate business students and law students who expect to serve either as
advisors to Boards of Directors or on Boards of Directors of public companies or non-profit organizations.
While most of the course will focus on established public companies, much of the course content will be useful

to those individuals who are primarily interested in entrepreneurial organizations, family corporations, or public
sector non-profit entities.

Course Format

The normal format of the class will be to invite one or more guest speakers to address the students. The guests
will be encouraged to provide ample opportunity for questions during their presentations. The individuals that
will be invited to class will include a mix of entrepreneurs, senior executives from major corporations, directors
of public and private entities, politicians, leaders of non-profit entities, corporate lawyers and partners of major
accounting firms.

Informal Class Meeting

Professor Cunningham will host several informal lunch meetings with class members. The purpose of these
lunch meetings is to give students and Professor Cunningham an opportunity to have informal small group
discussions on topics related to the course. Students are not required to attend these meetings.

About the Faculty

William H. Cunningham served as Dean of the College and Graduate School of Business (1983-85), President
of The University of Texas at Austin (1985-1992), and Chancellor of The University of Texas System (1992-
2000). Dr. Cunningham serves on a number of public and private corporate Boards including Southwest
Airlines, Lincoln Financial, John Hancock Mutual Funds, Introgen Therapeutics, LIN Television, and Hayes

Required Reading Assignments

Students should stay current with news regarding Corporate Governance issues and are expected to read the
Wall Street Journal and the New York Times daily. Students enrolled in the course may sign up for these papers
at a reduced educational rate in class or through the course Web site. Most weekly assigned reading material
may be accessed through the course Web site.

Optional Reading Material

The following books present an interesting and somewhat contradictory perspective on corporate governance.
Each of these books is available in the Perry Castaneda Library.

   1. Blair, Margaret M., Ownership and Control: Rethinking Corporate Governance for the Twenty-first
   2. Cadbury, Sir Adrian, The Company Chairman.
   3. Charkham, Jonathan, Keeping Good Company: A Study of Corporate Governance in Five Countries.
   4. Leighton, David S.R. and Donald H. Thain, Making Boards Work.
   5. Roe, Mark J., Strong Managers, Weak Owners: The Political Roots of American Corporate Finance.
   6. Useem, Michael, Executive Defense: Shareholder Power and Corporate Reorganization.

   7. Ward, Ralph D., 21st Century Corporate Board.
   8. Welsch, Jack and Welsch, Susan, Winning.


A significant portion of the content of the material delivered in class will come from the guest speakers and in-
class discussion. Therefore, it is critical that every student who enrolls in the class make a commitment to
attend all of the classes. Any student who has two unexcused class absences will have his or her end of
semester grade reduced by one-half grade. Each additional unexcused absence will result in the student’s grade
being reduced by an additional one-half grade. Excused absences do not include obligations to other classes,
interviews for jobs, or otherwise worthy university or professional activities. Excused absences must be
approved by Professor Cunningham. Out of respect to your fellow classmates and our guest speakers, all
students must arrive on time for class and not leave until the class is formally dismissed.

Course Requirements and Grading

Students will be evaluated on the basis of class participation (30%), case assignments (40%) and an
examination (30%). Professor Cunningham will be pleased to answer questions on any aspect of how students
will be evaluated.

       Class Participation: In-class participation will be evaluated based on the quantity and quality of in-class

       Case Assignments: A major written case will be made available to students prior to April 1. Students
       will be required to submit electronically a written analysis of the case by April 17 to Professor
       Cunningham. The case solution may not be more than ten double-spaced pages. Please understand that
       Professor Cunningham has read the case. You do not need to summarize the case. There will also be
       several cases discussed in class. All students will be expected to prepare a one-page, double-spaced
       executive summary of the key issues in each of these cases. These must be submitted electronically to
       Kate Doty, the course's teaching assistant, prior to class through a link on Blackboard’s “Assignment”

       Examination: A short list of questions that are designed to focus students’ attention on some of the more
       important issues that will be discussed in class or presented in the reading materials are listed as a part of
       each class assignment. Periodically, one or more new questions will be added to the list based on class
       discussion. These new questions will be posted on the revised course syllabus on the course Web site.
       A closed note bluebook examination will be drawn entirely from the focused questions and will be
       administered in class on May 1. Questions associated with the cases will not be on the examination.

Electronic Devices

Students are not permitted to use computers, telephones, or other forms of electronic communication devices in

Name Identification

You are required to bring with you to class a large name card, place it in front of you, and sit in the same seat
each class.

Course Web Site

The course will utilize a Web site, available through To access the site, go to You will be asked to enter your UTEID to access the site. Alternatively, enter
UTDirect and follow the links for Academic Services and Course Web Sites.

Password-Protected Class Site

Password-protected class sites are available for all accredited courses taught at The University. Syllabi,
handouts, assignments and other resources are types of information that may be available within these sites.
Site activities could include exchanging e-mail, engaging in class discussions and chats, and exchanging files.
In addition, class e-mail rosters will be a component of the sites. Students who do not want their names included
in these electronic class rosters must restrict their directory information in the Office of the Registrar, Main
Building, Room 1. For information on restricting directory information see:

Students with Disabilities

The University of Texas at Austin provides upon request appropriate academic accommodations for qualified
students with disabilities. For more information, contact the Office of the Dean of Students at 471-6259.

Academic Dishonesty

I have no tolerance for acts of academic dishonesty. Such acts damage the reputation of The University. The
minimum penalty for an act of academic dishonesty will be a zero for that assignment or exam. The
responsibilities for both students and faculty with regard to the Honor System are described on

Course Assignments (WORK IN PROGRESS)

This course syllabus is work in progress and it will always be work in progress. In addition, one or more
speakers may develop conflicts that forces changes in the syllabus. There are too many new events, regulatory
body rulings, and court decisions that impact the governance of corporations to make this course a static event.
Therefore, students are responsible for reviewing the course Web site on the Wednesday prior to class to
determine if there have been any changes in course assignments. We will discuss any new articles that have
been assigned at the end of each class.

Speakers’ biographies will be posted to the Web site prior to class.

                                             JANUARY 17

Nature and Structure of Corporate Boards

Reading Assignments:
   1. The Board’s Missing Link, HBR, Cynthia Montgomery and Rhonda Kaufman, March 2003, p. 86
   2. A Report Card - On You!, CBM, March/April 2005,
   3. Move Over, CEO: Here Come the Directors, WSJ, October 9, 2006
   4. How Well Run Boards Make Decisions, HBR, November 2006 (view article on HBR Web site)
   5. SEC Asks Firms to Detail Top Executives’ Pay, WSJ, August 31, 2007
   6. 10 Questions Every Director Should Ask, CBM, May/June 2005

Focused Questions:
   1. Describe the power relationships between the board, management, and the shareholders. What can be
      done to align these three groups?
   2. What are the key responsibilities of members of boards of directors to the firm they serve?
   3. How does the business judgment rule protect directors? Explain.
   4. What are the implications of the Disney case for corporate directors?
   5. What are directors doing to become better fiduciaries for the firm's stockholders? What are the
      implications for management?
   6. How do well run boards make decisions?
   7. What questions should every corporate director ask every CEO?

                                             JANUARY 24

Development of a Board

Reading Assignments:
   1. Independence of Directors is Elusive Goal of Reform, WSJ, July 22, 2003
   2. Building Better Boards, HBR, May 2004
   3. More CEO's Say 'No Thanks' To Board Seats, WSJ, January 28, 2005
   4. What It Takes to Be a Lead Director, CBM, March/April 2006
   5. How Am I Doing?, WSJ, October 9, 2006
   6. A Path to a Seat on the Board? Try the Fairway, NYT, March 11, 2006
   7. More Boards Seek Directors Who Aren’t CEO’s, WSJ, December 17, 2007
   8. When Chairman and CEO Roles Get a Divorce, WSJ, January 14, 2008

Focused Questions:
   1. What are the key factors that should be analyzed in determining if a director is independent?
   2. How "engaged" should a board be with the firm? What steps can be taken to improve the performance
      of corporate boards?
   3. Why are more CEO's saying "no thanks" to board seats?
   4. How should a lead director interact with management and the board?
   5. What process should a firm use to recruit its Board of Directors?
   6. What qualifies an individual to serve on a corporate Board of Directors?
   7. Should a corporate board try and evaluate its own performance? If you feel it should, how should it

   8. Why are more boards seeking directors who are not CEO’s?

Accounting Fraud and the Role of the Board of Directors
Case: Accounting Fraud at WorldCom (9-104-071)

Case Questions:
   1. How did WorldCom’s culture impact the Board’s decision?
   2. Did Mr. Sullivan adequately communicate with the WorldCom Board?
   3. Should Arthur Andersen have classified WorldCom as a “high risk client?” Explain.
   4. Did the Board of Directors fail WorldCom?
   5. Did the Compensation Committee function properly?
   6. Are there any heroes in the WorldCom case?
   7. Who ultimately failed WorldCom?
   8. Did the history and structure of WorldCom hurt the firm?

                                               JANUARY 31

The Role of the General Counsel

Speaker: Charles Matthews, General Counsel of Exxon

Reading Assignments:
   1. Class Action: Every Director’s Nightmare, CBM, Special Legal Issue 2001
   2. In Corporate Corruption Cases, Prosecutors Face Daunting Task of Proving Intent to Do Wrong, WSJ,
       April 8, 2004
   3. The WorldCom Settlement and Director Liability, Wachtell, Lipton, Rosen & Katz, January 7, 2005
   4. Seven Things a Prosecutor Probably Won't Tell You (I Know, I Used To Be One), CBM May/June 2006
   5. Unmasking the Seven Secrets of the Greatest Lawyers, CBM, July/August 2006
   6. Antitrust Law's Delicate Dance, WSJ, October 12, 2006
   7. The Secret Life of an Informant, WSJ, October 21-22, 2006
   8. 'Benron' Behind Bars, WSJ, April 21, 2007
   9. Lawyer-Client Relationships Go Both Ways, CBM, July/August 2007
   10. Merck’s Tactics Largely Vindicated As It Reaches Big Vioxx Settlement, WSJ, November 10, 2007

Focused Questions:
   1. What are the implications for class action lawsuits for board members?
   2. Why is "intent" so important in white-collar crimes?
   3. What are the implications of the settlement in the lawsuits against the WorldCom directors that were
      announced on January 6, 2005?
   4. What are the major responsibilities of a General Counsel of a major world-wide corporation?
   5. What can be done to change the litigation culture in the United States?
   6. When does an alliance that is legal cross the line to become a collusion that is illegal?
   7. How should a white collar criminal try and adjust to prison?

Corporate and Personal Ethics

Speaker: Bernard Rapoport, Founder and Chairman Emeritus of American Income Life Insurance Company

Reading Assignments:
   1. How Unethical Are You?, HBR, December 2003
   2. The Virtue Matrix, HBR, March 2002
   3. Money and Morals at GE, Fortune, November 15, 2004
   4. Ethical Breaches Pose Dilemma for Boards: When to Fire a CEO, WSJ, February 16, 2006

Focused Questions:
   1. What is meant by the "virtue matrix?"
   2. How is Jeffrey Immelt changing GE's perspective on social responsibility?
   3. What are the implications to corporate America if the American public loses confidence in the free
      market system?
   4. What can corporate America do to restore the public’s confidence in businesses?
   5. What type of ethical breaches requires a board to terminate a CEO?

                                               FEBRUARY 7

Venture Funding

Speaker: Joe Aragona, General Partner and Founder, Austin Ventures

Reading Assignments:
   1. Take the Money – or Run?, HBR, November 2004
   2. Making Sense of Corporate Venture Capital, HBR, March 2002
   3. Will Silicon Valley Rise Again, CBM, May/June 2006
   4. Venture Funding Twist, WSJ, February 14, 2007
   5. A Kink in Capital's Gold Chain, NYT, October 7, 2006
   6. The Under-Taxed Kings of Private Equity, NYT, July 29, 2007

Focused Questions:
   1. Explain the differences between a strategic and a financial investment from both the perspectives of the
      venture firm and the recipient of the funds.
   2. Is it true that investors in first round financing normally get "crushed?" If so, why do people and
      venture funds invest in first round financing?
   3. What is meant by an "angel" investor?
   4. What role does a board of directors play in most venture-backed firms? How does the role of a board of
      a venture-backed firm vary from a mature publicly-traded company?
   5. What is meant by "venture debt?" What are the advantages and disadvantages of venture debt, the
      entrepreneur, and the venture capitalist?

Perspective of a CEO/Entrepreneur
Speaker: Shelby Carter

                                              FEBRUARY 14

Governance of the House of Representatives

Speaker: The Honorable Tom Craddick, Speaker of the Texas House of Representatives

Governmental Relations/Lobbyists

Speakers: The Honorable Mike Millsap, Lobbyist and former State Representative
          The Honorable David Sibley, Lobbyist and former State Senator

Reading Assignments:
   1. What Top Lobbyists Can Do For You - And For How Much, CBM, March/April 2003
   2. Inquiry on Lobbyist Casts a Shadow in Congress, NYT, April 11, 2005
   3. Growing Role for Lobbyists: Raising Funds for Lawmakers, NYT, January 27, 2006
   4. Deal Maker Details the Art of Greasing the Palm, NYT, August 6, 2006
   5. Siemens Probe Spotlights Murky Role of Consultants, WSJ, April 20, 2007

Focused Questions:
   1. What role do lobbyists play in Washington?
   2. Should lobbyists sponsor fundraising projects for elected officials?
   3. Should former government officials be permitted to lobby once they have left the government?
   4. What role should a "consultant" play in helping its multinational clients win contracts in developing

                                               FEBRUARY 21

Role of a Corporate Board in a Start-Up Company

Speaker: Alan Blake

Reading Assignments:
   1. Why Entrepreneurs Don't Scale, HBR, December 2002
   2. A Helping Hand, More lending programs offer aid for aspiring entrepreneurs with nowhere else to turn,
      WSJ, November 29, 2004
   3. Charge It!, WSJ, November 29, 2004
   4. It’s All Relative. A family business loan can be a recipe for disaster. It doesn’t have to be. WSJ,
      November 29, 2004

Case: Hewlett Packard Company: The War Within (Harvard 9-107-030)

Case Questions:
   1. Did Ms. Fiorina fit into the Hewlett-Packard culture?
   2. Why did the board leaks begin?
   3. What should have been done to stop the board leaks?
   4. Did the board try and micromanage Ms. Fiorina?
   5. Was Ms. Fiorina’s termination handled properly?

                                             FEBRUARY 28

Enron, High Profile Corporate Failure

Speaker: William Banowsky, CEO, Magnolia Pictures

Reading Assignments:
   1. Enron's Chief Offers His Case, NYT, December 14, 2005
   2. Enron Defense: What Crimes?, WSJ, February 6, 2006
   3. Guilty Verdicts Provide 'Red Meat' To Prosecutors Chasing Companies, WSJ, May 26, 2006
   4. Lay's Legacy: Corporate Change -- But Not the Kind He Expected, WSJ, July 6, 2006
   5. Fastow Gets His Moment In the Sun, NYT, November 10, 2006

Focused Questions:
   1. What was the theory behind Ken Lay's defense?
   2. How did the theory behind Lay's defense differ from the theory behind Skilling's defense?
   3. Should Lay and Skilling have testified in their own defense?
   4. What impact will the guilty verdict in Enron, Tyco, WorldCom, etc. have on corporate America?

                                               MARCH 6


                                               MARCH 13


                                               MARCH 20

Private Wealth Management

Speaker: Geoffrey Raynor, CEO of Q Investments

Reading Assignments:
   1. Big Hedge Funds Feel Right at Home in Greenwich, Conn., WSJ, August 3, 2005
   2. SEC Wants Hedge Funds in Open, WSJ, April 9, 2004
   3. Hedge Funds Draw Scrutiny Over Merger Play, WSJ, January 11, 2006
   4. Hedge Funds Into the Boardroom, CBM, January/February 2007
   5. Democrats Lose Zeal for Raising Hedge Fund Tax, WSJ, July 31, 2007
   6. How Cerberus Hedged Auto Bets. Buyout Shop Brought in Some Savvy Investors; Where the Risk
      Lurks, WSJ, September 25, 2007
   7. Hedge Funds Feeling Pinch on Credit, Too, WSJ, December 27, 2007

Focused Questions:

   1. What is meant by alternative investments and hedge funds?
   2. How does a hedge fund "hedge" its investors' risk?
   3. Should "non-accredited" investors be permitted to invest in hedge funds?

Compensation Systems

Case: Executive Compensation at General Electric (A) (9-105-072)

Reading Assignments:
   1. Director Pay: The Gathering Storm, CBM, September/October 2006
   2. Compensation Experts Offer Ways To Help Curb Executive Salaries, NYT, December 30, 2006
   3. Shareholders Push For Vote on Executive Pay, WSJ, February 26, 2007
   4. Ten Ways to Restore Investor Confidence in Compensation, WSJ, April 9, 2007
   5. More Than Ever, It Pays to Be the Top Executive, NYT, May 25, 2007
   6. SEC Asks Firms to Detail Top Executives’ Pay, WSJ, August 31, 2007
   7. I’m Asking Nicely: Please Show Me The Door, NYT, January 13, 2008

Focused Questions:
   1. Is CEO's compensation being driven primarily by basic economic forces? Explain.
   2. What can corporate boards do to help make compensation plans more acceptable to shareholders?
   3. Should shareholders be given the right to vote on executive compensation?
   4. What can be done to tie pay more closely to performance, and cut back on excessive benefits and perks?
   5. How are boards reacting to the pressure to reduce executive perks?

                                                 MARCH 27

The Role of the Chief Financial Officer

Speaker: Laura Wright, CFO, Southwest Airlines

Reading Assignments:
   1. Time to Bury EBITDA, Pro Forma Earnings, and Stupid Cash Tricks, CBM, September/October 2004
   2. Off-Ramps and On-Ramps, Keeping Talented Women on the Road to Success, HBR, March 2005
   3. Southwest’s New Flight Plan: Win More Business Travelers, Low-Cost Airline Will Charge More for
      Tickets with Perks: Will Bargain Buyer Stay Loyal? WSJ, November 27, 2007
   4. An Airline Shrugs at Oil Prices, NYT, November 29, 2007

Focused Questions:
   1. Why is EBITDA not a good measure of a firm's performance?
   2. Why has Southwest Airlines been able to maintain its profitability?
   3. What are the primary responsibilities of the CFO?
   4. What can be done to help give women a reasonable chance to succeed in business?
   5. What can be done to help women get back on the fast track if they have left their careers?

The Role of the Chief Executive Officer

Speaker: Kenneth Jastrow, Chairman of the Board and CEO, Temple-Inland Financial Services

Reading Assignments:
   1. Warren Buffett, Unplugged, WSJ, November 12-13, 2005
   2. What Executives Should Remember, HBR, February 2006
   3. How to Fire a CEO?, WSJ, October 30, 2006
   4. Executive's Fatal Flaw: Failing to Understand New Demands on CEO's, WSJ, January 4, 2007
   5. The Wrong Way to Pick a Chief Executive...and the Right Way, CBM, May/June 2007
   6. How Successful Leaders Think, HBR, June 2007 (view article on HBR Web site)
   7. The CEO Who Couldn't Keep His Foot Out of His Mouth, HBR, December 2006 (view article on HBR
      Web site)
   8. For Boards, Firing or Keeping a CEO Can Be Tough Call, WSJ, October 22, 2007
   9. Bear CEO’s Handling Of Crisis Raises Issues, WSJ, November 1, 2007

Focused Questions:
   1. What criteria should a board examine when its selects a new CEO?
   2. What makes Warren Buffett such a successful CEO?
   3. What is the most important responsibility of the CEO?
   4. How should the Board of Directors manage the succession process?
   5. Why is it so hard to fire a CEO?
   6. Why are CEO's referred to as "global politicians?"
   7. What is meant by "integrative thinking?" How does it vary from "conventional thinking?"
   8. What are some of the most important lessons that Peter Drucker left business executives?

                                                  APRIL 3

The Relationship Between the Corporation, the CEO, and the Media

Speakers: Wayne Slater, Chief Political Writer, Dallas Morning News
          James Moroney, Publisher and CEO of the Dallas Morning News

Reading Assignments:
   1. Analysis: Post-Mortem of CBS’s Flawed Broadcast, NYT, January 11, 2005
   2. How Old Media Can Survive in a New World, WSJ, May 23, 2005
   3. Publishers Say Fact-Checking Is Too Costly, WSJ, January 20, 2006
   4. Behind the Fall of Imus, A Digital Brush Fire, WSJ, April 13, 2007

Focused Questions:
   1. What can a major news organization do to insure that it reports the news in a fair and accurate manner?
   2. What can be done to help "old media" survive and prosper in the future? Be specific about the various
      forms of old media.
   3. Should a newspaper or other news organization be able to protect their sources such that they can not be
      identified even to a prosecutor in a criminal case?
   4. How much "fact checking" should a publisher be expected to do?
   5. How should a CEO respond to the media concerning a crisis in his or her company?
   6. Should a CEO be proactive with the media?
   7. When should a CEO not take a call from the media?
   8. What is meant by "off the record" and "for background only?"

   9. How should CBS and NBC have dealt with Don Imus?

                                                 APRIL 10

Public Relations

Speaker: Jeff Hunt, CEO, GCI Read Poland

Reading Assignments:
   1. Gilded and Gelded! Hard-Won Lessons From the PR Wars, HBR, October 2003
   2. Wal-Mart Boss's Unlikely Role: Corporate Defender-in-Chief, WSJ, July 26, 2005
   3. Grading the C.E.O. Speech, NYT, September 27, 2005
   4. Behind the Scenes, PR Firm Remakes Wal-Mart's Image, WSJ, December 7, 2006
   5. 10 Crises That Lie Around The Next Corner - and How They Got There, CBM, May/June 2007
   6. Clemens Faces Danger in Spin of Steroid Case, NYT, January 13, 2008

Focused Questions:
   1. What can firms do to avoid public relations problems?
   2. How has Wal-Mart tried to improve its image? Do you feel it will be successful?
   3. What role should PR play the firm’s communications strategy?
   4. What does the CEO need to understand about public relations?

                                                 APRIL 17

Institutional Investors

Speaker: Bob Boldt, Former President and CEO, UTIMCO

Reading Assignments:
   1. Calpers Target Directors Who Neglect Holders, WSJ, April 16, 2004
   2. Big Shareholders Are Shouting Even Louder, WSJ, November 23, 2005
   3. Behind Soaring Executive Pay, Decades of Failed Restraints, WSJ, October 12, 2006
   4. Voting Records At Mutual Funds: Still a Hard Read, WSJ, December 22, 2006
   5. Calper’s Chief Invests in Asia, Commodities, WSJ, April 3, 2007

Focused Questions:
   1. Who are the modern shareholder activists and how should the firm deal with them?
   2. How is Calpers trying to impact corporate governance? Is it likely to be successful?
   3. Are institutional investors playing a positive role as corporate activists?
   4. What should mutual funds report to their investors with respect to the mutual funds votes on proxy

Entrepreneurship: Introgen Goes Public
Speaker: David Nance, Founder, President and CEO, Introgen Therapeutics

Reading Assignments:

   1. The Great Money Hunt, WSJ, November 29, 2004
   2. You Got the Big Break, Now What, WSJ?, November 13, 2006
   3. It's Alive! Meet One of Biotech's Zombies, NYT, February 11, 2007
   4. Meeting the Challenge of Corporate Entrepreneurship, HBR, October 2006 (view article on HBR Web
   5. The Secrets of Serial Success, WSJ, August 20, 2007

Focused Questions:
   1. What alternatives exist to fund most small businesses?
   2. Why do most entrepreneurs fail to make the transition from successful entrepreneurs to senior executive
      in a medium to large corporation?
   3. How does the role of a corporate board vary over time as a firm matures from the start-up to a well
      established public company?
   4. What are the real costs for a firm when it "goes public?"
   5. How does a young public company attract directors?
   6. How can large corporations be more creative in building new businesses?
   7. Why do some entrepreneurs succeed in a variety of ventures, while others are unable to do so.

                                                  APRIL 24

Governance of a Non-Profit Organization

Speaker: Lee Walker, Chairman of the Board of Capital Metro and former COO of Dell

Reading Assignments:
   1. The New Work of the Non-Profit Board, HBR Sept.-Oct. 1996
   2. Working on Non-Profit Boards: Don’t Assume the Shoe Fits, HBR, Nov.-Dec. 1999
   3. The High and Low Notes of Nonprofit Board Service, CBM, Summer 1999
   4. As Universities Get Billions in Grants, Some See Abuses, WSJ, August 16, 2005

Focused Questions:
   1. What are the differences between governing a for-profit and a not-for-profit organization?

External Auditor and the Audit Committee

Speaker: Scott Halliday, Partner, Ernst & Young

Reading Assignments:
   1. Behind Wave of Corporate Fraud: A Change in How Auditors Work, WSJ, March 25, 2004
   2. Critics See Some Good From Sarbanes-Oxley, WSJ, July 30, 2007

Focused Questions:
   1. What are the implications of risk-based auditing procedures?
   2. What advice do convicted executives have for other executives who are not in jail?
   3. What can be done to reverse the pattern of the use of aggressive and often deceptive accounting
      practices to improve short-term earnings?
   4. What are the implications of Sarbanes-Oxley for corporate America?

   5. How should the independent auditor interact with the audit committee, the Board, and management?
   6. What has been the impact of Sarbanes-Oxley?

                                                 MAY 1

Exam in Class

CBM – Corporate Board Magazine
WSJ – Wall Street Journal
NYT – New York Times
HBR – Harvard Business Review
BW – Business Week

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