Leadership and Corporate Accountability
Of all the mistakes I made while a student here, my single greatest regret, the one thing I dream of changing if I had the chance to do it all over again, would be to have the world simply stop for three minutes after every case discussion in class. That’s right, stop—go deathly silent, and the only thing I was allowed to do during those few precious minutes was jot down whatever was “on my mind” at the time. It could be a conceptual note based on the professor’s case summary, or just as likely it might have been a personal note to call my mother because something someone said during class caused me to think of her, how important she is to me, and how long it had been since I had spoken to her. Oh, what I’d give today for a notebook full of those “personal reflections.”
Leave your reflections as comments!
Steve Myrick
Luke Owings
chuckdieselfuel
Jessica Lackey
Complying legally can be a good compromise because laws are developed over the years just for the type of grey area situation that you’re facing. Example- how soon to alert FDA of a potential clinical issue when the law says 7 days.
Looking at a hostile bid as a one-shot deal, you often want to get it over with as soon as possible to limit the pain and to keep other bidders from joining in and raising the price. However, remember that the first shot is only the start of an overall strategy with that takeover and any future takeovers.
Oracle v. Peoplesoft – While managers need to be ultimately responsible to shareholders, it’s impossible to give shareholders complete direct control. While law can create boundaries for managers, some “open space” is unavoidable (and desirable).
Meinhard v. Salmon – Principle-based law givers the government (the courts) a lot more power to go after possible wrongs while statute-based law can limit their authority.
Insider Trading – More and more regulation can choke off the economy. Think of the elaborate paper trails that companies create today just to cover their own asses.
Greenbriar Growth Partners – What continuing value, if any, do the principles of fiduciary duty have in today’s world of complicated relationships? (A) They can put a spotlight on conflicts, and (B) risk of litigation and exposure (as well as reputational risk) causes these people to explicitly be serious about their duties/responsibilities.
Enron – It’s easy to believe that your company’s boom times are genuine and will be long-lasting, due to skill or intelligence. Believing that makes you vulnerable to poor discipline, poor oversight, perverse incentives and downright fraud.
Enron (day 1) – The Board and senior management are expected to understand intimately every piece of their business. This is tempting, but hugely naive.
Enron (day 2) –
(A) Sarbanes-Oxley codified a lot of the common-sense ethical guidelines. It also added a huge burden of compliance on companies/mgmt. (British definition of SarbOx: ‘Full Employment for Accountants’).
(B) A good board has the following characteristics: 1. diverse functional skills, 2. heterogeneous backgrounds, 3. willingness to read about/invest itself in the company.
Chesapeake Energy – Grey issues are the ones that go to leaders.
Beech-Nut – It’s a fundamental problem to offer a marketing slogan that is close to impossible to prove given the technological and testing constraints of the day.
Beech-Nut (day 2) – I think that we glorify the role of the FDA and the regulators. We assume that they are acting completely in the ‘interest of the public’ by holding management to a ‘higher standard’. However, just as often, it seems they prosecute because they, for some reason or another, feel neglected or unliked by a company and litigate to get back at them for treating them wrong.
H&R Block – Areas of responsibility are very difficult when referring to customers especially when you have technically complex products and are selling to less sophisticated customers.
James Burke (Tylenol) – Own the problem or it will own you.