Subject to revision
Accounting 610
International Corporate Governance
Fall 2015
Instructors: Shirley J. Daniel, Ph.D., Office BUSAD B-201, Ph. 956-3249
Fax: 956-9685; email:
Office Hours: Thursday and Friday 3:00 to 5:30 p.m. and by appointment
Class meeting time and location:
Thursday from 6 to 8:45 p.m. BusAd C102
Required Readings in lieu of textbook: Harvard Business School Publishing Cases and Readings can be purchased from the HBSP website at the link provided on the Laulima course website. The instructor has uploaded suggested resource readings on the Laulima course website. In addition, there are numerous web resources that can be found, some of which are noted below in syllabus. Students should use these resources for their class projects, class discussions and preparation for exams. The instructor reserves the right to recommend additional readings and materials to enhance the learning experience and discussion of recent corporate governance developments during the semester.
Link to HBS cases for purchase:
Useful websites for the discussions:
International Corporate Governance Network
Asian Corporate Governance Association
European Confederation of Directors’ Associations
Institutional Shareholder Services
Glass Lewis & Co.
World Bank Corporate Governance resources links
MSCI – now parent of Governance Metrics International
National Association of Corporate Directors
New York Stock Exchange - NYSEEuronext
NASDAQ (corporate governance)
SEC
OECD (corporate governance)
KPMG Audit Committee Institute
Equilar Research Reports:
Equilar Annual CEO compensation studies with links to NY Times articles:
Frederick Cook & Company (exec compensation consulting).
Towers Watson (HR consultants)
Weil Gotshal (law firm)
The Conference Board
Course Description:
Now more than ever, international investors and managers need to understand the context of international business. Accountants, consultants, lawyers, officers and board members need to understand their fiduciary, legal and ethical oversight responsibilities. In light of recent regulatory changes, reduced public confidence, and the current financial crisis, becoming an educated and responsible manager or financial executive requires specialized knowledge and skills. This course is designed for graduate students in business and accounting to help students recognize and understand the complex and critical issues of international corporate governance, financial reporting and ethical conduct. Course topics include:
- The basic structure of corporate governance in the U.S., major European markets, and Asia.
- Various roles of internal and external stakeholders, regulators and gate- keepers in each world region.
- Standards and best practices of corporate governance in each world region.
- Shareholder rights and responsibilities
- Director selection, rights and responsibilities
- Executive rights, responsibilities and compensation
- Governance reforms and other recent developments in each region
Course Format:
Student preparation outside of class will require student self-study, web-based and library based research, and assigned readings. In-class sessions will include lectures, guest speakers, class discussions of cases and reading assignments, and student group presentations.
Grading Breakdown and Expectations:
Class participation/case discussions 20
Four group presentations and/or short papers describing Corporate Governance
standards and best practices and evaluating the corporate governance practices
of 3 companies from the 3 different world regions against these standards. (4@10)40
Mid-term Examination20
Final Exam/paper20
Total *100
Accounting 610
International Corporate Governance
Fall 2015
Tentative Course Schedule and Assignments
DateTopic/lecture materials / HBS cases and related reading assignments. Also refer tomaterials on Laulima and your own web research / In-Class activities
1 - Thursday
August 27
Review course requirements and assignments.
Review the corporate governance rating systems by CALPERS, MSCI-ISS, GMI, Glass Lewis / HBS Readings:
“Models of Corporate Governance: Who’s the Fairest of Them All?” Rock Center for Corporate Governance, David F. Larcker and Brian Tayan CG-11
HBS Reading: Professor David F. Larcker and Brian Tayan The Rock Center for Corporate Governance, “CORPORATE GOVERNANCE RATINGS:
GOT THE GRADE. WHAT WAS THE TEST?”
CG-08
Session 1 Laulima readings / Discuss course expectations.
Form student groups, pick companies and industry groups.
Student groups organize and set their work plans.
2 - Thursday
September 3 / Overview of corporate governance issues.
HBS Case “Oracle’s –Hostile Takeover of PeopleSoft” CG4A
Review SEC websites and NYSE and NASDAQ listing requirements
Session 2 Laulima readings
3 - Thursday
September 10
The role of the auditor in corporate governance
Other regulatory watchdogs / Web Research - PCAOB
- Review PCAOB website
- Review PCAOB reports for Big 4 auditing firms
Session 3 - Readings on Laulima
China Metals Recycling Holdings Ltd HK 1051 / Guest Speaker:
Terri Fujii, Partner CW Associates, CPAs
4 - Thursday
September 17
Basics of corporate structure and governance in the U.S.
Shareholder rights and responsibilities and Director selection, Director rights and responsibilities / Review OECD website - Principles of Corporate Governance
Session 4 Laulima Readings
HBS Case “These People are Fiduciaries”HBS 314067
HBS Case: “Hewlett-Packard Co: The War Within” 107030-HCB / Guest speaker:
Tung Chan
Student groups continue to organize groups and develop their rating systems
5 - Thursday September 24
The role of management and the CFO
Executive Compensation
Executive rights, responsibilities, performance and compensation
Review of Proxy information and information for U.S. firms selected for individual project / Case: Yahoo! Inc: Marissa Mayer’s Challenge W13207
HBR March 2012 “The Incentive Bubble” Mihir Desai and other Laulima readings
Website resources for executive compensation from Equilar, Watson Wyatt Worldwide and Frederic W. Cook (see Laulima and URLs above)
Session 5 Laulima readings / Guest speaker:
John Price, PriceHorne
Student group presentation 1: Present your corporate governance rating standards.
6 - Thursday October 1
Investor Perspectives
Shareholder perspectives and regulations / Review investment policies on websites for CALPERS, Hawai'i ERS, and another large institutional investment fund.
HBS Case: Sharks in the Water: Battling an Activist Investor for Corporate Control (A) CG-20A
HBS Case: “Sovereign Wealth Funds: Barbarians at the Gate or White Knights of Globalization?” 9-712-022
Session 6 – Laulima readings / Guest Speakers:
Panel of Investment fund managers:
Chris Borden, principal, Kobo Wealth Mgt
·Dale Kobayashi, ex CIO, Bishop Street Capital
Robert Howe, Geomatrix and Akamai Capital
Courtlin Holt-Nguyen, partner, Interlaced Investment Advisors
7 – Thursday October 8
Corporate Governance Practices in Asia – China / HBS Case “Corporate Governance in China: Current Practice, Key Problems”309058
Alibaba Goes Public 115029
Session 7 readings on Laulima / Guest Speaker: Charles Booth, Richardson School of Law
Student group presentation 2: Present your corporate governance rating for the US company you have chosen.
8 - Thursday October 15 / MIDTERM EXAM (primarily US corporate governance issues) / Midterm exam
9 - Thursday
October 22
Corporate governance in the EU, Germany and Northern Europe
Stakeholder models of governance / Reading: “Recurring Failures in Corporate Governance: A Global Disease?” Laulima readings
Frontline video – Black Money
HBS Case: “Hermes Paris” INS508
Session 9 readings on Laulima / Guest Speaker: Dr. Klaus Macharzina, Professor Emeritus, University of Hohenheim
10 - Thursday
October 29
Leadership and Board Diversity
Continue to prepare for Presentations / Session 10 Readings onLaulima
“What CEOs Really Think of Their Boards” Sonnenfeld, Kusin and Walton, HBR April 2013 Laulima
Reading: “Dysfunction in the Boardroom” Groysberg and Bell, HBR June 2013 Laulima
HBS Case: “Beth Stewart: Navigating the Boardroom” 413094 / Guest Speaker: CEO - Maury Myers
Student group presentation 3: Present your corporate governance rating for the European company you have chosen.
Student groups work to develop their corporate governance rating scheme and assess their Asian company corporate governance.
11 - Thursday
November 5 / Session 11 readings on Laulima
Case: “Sony Corporation – is the Sum Greater than the Parts?” TB0365 / Guest Speakers:
Keith Russell
12 - Thursday
November 12
Corporate Governance Practices in Asia
Continue to prepare for Presentations
International Mergers and Acquisitions / Session 12 readings on Laulima
Emerging Market CG indices,
ASEAN Corporate Governance Scorecard project
Case: “Tata Motors’ Acquisition of Daewoo Commercial Vehicle company” HBS 9-908M94 / Guest Speaker:
Diane Desierto, Richardson School of Law
Student groups work to develop their corporate governance rating scheme and assess their Asian company corporate governance.
13 - Thursday
November 19 / Session 13 Laulima readings
“Mergers and Acquisitions: Overcoming Pitfalls, building synergy and creating value” Laulima readings / Guest Speaker – Jim Ajello, CFO HEI
Student group presentation 4: Present your corporate governance rating for the Asian company you have chosen.
Thursday November 26 / Thanksgiving Holiday
14 - Thursday
December 3 / Session 14 Laulima readings
Case: “Corporate Governance Failure at Satyam” HKU 889
15 - Thursday
December 10 / Final Exam/paper
Class discussion questions and exam study hints
Discussion weeks 1 through 7
Summarize the agencies and guidelines involved in corporate governance in the U.S. What are considered as the major components of best corporate governance practices in the U.S.?
- What is unique about outside investors and why do they need protection through corporate governance regulations? Do current best practices in corporate governance in the U.S. sufficiently protect shareholders?
- Compare the services offered by ISS, Glass Lewis, and Governance Metrics, Inc. based on their websites. How do the firms and services differ?
- Do corporate governance rating agencies and proxy services, such as ISS, serve a useful purpose? Do they have a conflict of interest when they provide consulting services to help companies improve their CGQ ratings?
- Do you think that the executive certification of reports required by the Sarbanes-Oxley Act has added value or credibility to the financial reports of U.S. firms? What is the role of the PCAOB?
- What is the role of the external auditor in corporate governance?Do you think auditor opinions of internal controls have improved the quality of financial reports in the U.S.?
- What are the legal and fiduciary obligations of corporate directors?
Discussion week 8 through 12
Summarize the agencies and guidelines involved in corporate governance in the U.K., Germany and the E.U. What are the major differences you see between European and U.S. corporate governance guidelines? Which do you think are better? Are there European firms that are considered models for good corporate governance?
- Do you think that non-US firms should adopt regulations similar to SOX?
- The EU has recently proposed mandatory auditor rotation? What was the proposal? Do you think that there should be mandatory auditor rotation?
- What do you think about executive compensation in the U.S. compared to Europe? Do you think that executives in the US are paid too much?
- What do you think separation of the role of CEO and Chairman, which is more common in the U.K. compared to the U.S.?
- Do German corporate governance practices reflect a broader view of stakeholders than those in the U.S.? If so, why?
- Is director independence really related to better corporate governance?
- Several northern European countries have imposed quotas for women on corporate boards? What do you think about this approach? What does the research about women on boards show? What about board diversity in general?
Discussion weeks 12 through 15
Summarize the agencies and guidelines involved in corporate governance in Japan, Korea, China, Hong Kong, and India. What are the major differences and similarities you see with U.S. guidelines and practices? Are there any firms that are considered leaders in good corporate governance in Asia?
- What are some of the government and capital market infrastructure realities in China that will influence the practice of corporate governance regardless of the regulations?
- What factors would you consider if you were asked to serve on the board of directors of a firm in China?
- Japan has launched initiatives to allow firms to adopt corporate governance practicessimilar to those in the US. Does it make sense for Japan to emulate the U.S. in this way?
- Japanese firms are often accused of following form over substance. How might this impact corporate governance practices?
- What are the major differences between Korean and Japanese approaches to governance?
- What are some new developments in corporate governance in Southeast Asia?
- What has India done to improve corporate governance? How do you think that is working?
Paper hand-in due dates and/or in class presentations:
September 24 – Group assignment 1 (3 to 5 pages plus Powerpoint (if any) and 10 minute class presentation) – After familiarizing yourself with best practices for corporate governance, develop a corporate governance rating system that you will use to evaluate the practices of the 3 firms you will be assigned. Describe the system, justifying the components and how they will be operationalized. Prepare a powerpoint presentation and/or handout for the class to describe your system.
October 8 – Group assignment 2 (3 to 5 pages plus 10 minute class presentation) – Review the websites, financial reports and proxy statements for the U.S. firm you have been assigned and rate their corporate governance practices using the system you developed in assignment 1. Prepare a presentation for the class explaining your rating/evaluation of the strengths and weaknesses of the firm’s corporate governance practices.
October 29 – Group assignment 3 (3 to 5 pages plus 10 minute class presentation)– Review the websites, financial reports and proxy statements for the European firm you have been assigned and rate their corporate governance practices using the system you developed in assignment 1. Prepare a presentation for the class explaining your rating/evaluation of the strengths and weaknesses of the firm’s corporate governance practices.
November 12 – Group assignment 4 (3 to 5 pages plus 10 minute class presentation)- Review the websites, financial reports and proxy statements for the Asian firm you have been assigned and rate their corporate governance practices using the system you developed in assignment 1. Prepare a presentation for the class explaining your rating/evaluation of the strengths and weaknesses of the firm’s corporate governance practices.
Case discussion leadership and participation - Various Dates: All students will be expected to participate in all case discussions.
Midterm and Final Exams (October 15, December 10): Multiple choice, short answer, and short essay.
Examples of Possible Group project assignments – you may choose any industry you like, but try to find firms on 3 continents to analyze.
Industry/product (choose any 3 from different countries) / US firm* / European firm* / Asian firm*Cameras / Kodak (US) / Leica Camera AG (Germany) / Canon (Japan)
Automotive / Ford Motor / Fiat group (Italy) or BMW (Germany)
Peugeot (France) / Tata motors (India)
Or Hyundai (Korea)
Motorcycle / Harley Davidson / Dukati (Italy) / Kawasaki (Japan)
Beer/beverages / Fosters (Australia)
Boston Beer Company / Heinekin Holdings N.V. (Netherlands) / Kirin Holdings Company LTD (Japan) or Asia Pacific Breweries, LTD (Singapore)
Heavy equipment / Terex,
Caterpillar / Volvo Group (Sweden) / Komatsu (Japan)
Chemicals / Dow Chemical / BASF (Germany) / SABIC (Saudi Arabia)
Defense contractors / Northrop Grumman / SAAB AB Technologies (Sweden) / Mitsubishi Heavy Industries (Japan)
Semiconductor / AMD / CML Microsystems (UK) / Mosel Vitelic (Taiwan)
Confectionary/snacks / Hersheys / Cadbury (UK) / Meiji Dairies Corporation (Japan)
Home appliances / Whirlpool Corporation / Electrolux (Sweden) or
BSH Bosch und Siemens Hausgeräte GmbH (Germany) / LG (Korea)
Haier (China)
retail / Walmart / Carrefour / Lotte Shopping Co
airlines / American Airlines / Luftansa / Singapore or JAL
Telecom / Sprint / Vodaphone / NTT
Electronics / Motorola / Phillips/Nokia / Panasonic/Samsung
Oil and Gas / Exxon / BP / China Petroleum, Indonesia Pertamina
Semi-conductor services / Teradyne (TER) / ASML Holding NV (ASML) / Advantest (ATE)
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ACC 610 International Corporate Governance
Fall 2015