Koito Case

Based on the above problems of JB Hi-Fi, the company should make some adjustments to the board composition. In many situations, non-executive directors serves mainly the managers to increase their power. People that sit on a board do necessarilyhave some kind of personal or professional ties, since they are part of the same rather small social group, the business elite. Hence, the challenge is hence to create organisational structures that allow an efficient control despite these social ties. The only solution to solve the problem is transparency, for example, each director has to openly declare his or her ties. However this is not legally enforced or controlled, it depends entirely on the integrity and business ethics of the director. Despite of that, the efficiency of control mechanisms can still be enhanced by the existence of a self-imposed “ethical code” among the business elite, and a social control among these elite guaranteeing the observation of this code. As a result, JB Hi-Fi should fully acknowledge the need for directors and executives to observe the highest ethical standards of corporate behaviour and assist them in applying the Code of Conduct in

Question 1. How well do you think the governance system of JPMorgan Chase is working in protecting shareholder interests?

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

Your honors, this case is about the fundamental right of shareholder protection. The right of a small businesswoman to pursue her goals and not be punished for her initiative and contribution that is so essential to American business. That is the right

Farrar, J. (2008). Corporate Governance: theories, principles and practice. 2nd ed. South Melbourne, Vic: Oxford University Press

board directors. 13 In other words, the union, as a shareholder, can force manufacturers of the

The duty of loyalty requires the fiduciaries to act in good faith and in what they believe to be the best interest of Chevron in lieu of their personal interest. Even if the committee finds enough evidence to support the complaint filed by Bezirdjian, the Board must bring the lawsuit against the alleged directors. If the committee does not pursue the investigation with impartiality and independence, the committee might be open to attacks regarding its objectivity in dealing with the directors under investigation and then they may not be protected under the business judgment rule. If this is the case, the court can reject the committee’s findings because the committee from the beginning was not truly independent and disinterested.

Based on the case scenario, Doris, Betty, and Charlie formed a company called Bechdo Pty Ltd. The three members are the directors and Betty who is major shareholder holds 40% followed by Charlie and Doris who hold 20% each while the 20% is held by the rest. Based on the company constitution, a managing director has capacity to enter into a contract o behalf of the company up to a maximum of $100,000. Moreover, he/she can enter into contracts to the value of $900,000 upon getting consent for the board of directors. In this case, Bechdo Pty Ltd operates without a managing director since none was elected. The major issue is that Betty being the majority shareholder went ahead and entered into contract with BB Ltd, Jillo Pty Ltd, and

Smith should have disclosed his share information with the board of directors and voted in favor of Johnsons Skyhooks Limited. Being a board of director of a competing company, he failed to execute his duty in good faith with best interest of the corporation. According to the act, he should be fined up to 5000$ and can go to jail for at least six months.

The company believes that the executives and directors should own the stocks. In order to be a stockholder,

Bennett, 47 N.Y.2d 619 (N.Y. 1979) states, “the responsibility for business judgments must rest with the corporate directors; their individual capabilities and experience peculiarly qualify them for the discharge of that responsibility.” In other words, the court will allow some leeway in their corporate decisions due to their background and experience so the business judgment rule will apply. This case presents a three-person select committee that serves on behalf of the entire board of directors to handle special litigation for this corporation. A shareholder’s derivative action was brought against four of the board of directors in which this special litigation committee decided to terminate it. The shareholder’s felt this was unfair since the three-person committee is not a full representation of the board and the shareholders therefore, they should not be able to make those decisions. The three-person committee is unaffiliated with the 15 member board to keep decisions of the corporation fair. The court of appeals found no evidence proving the three-person committee was not unable to represent the full board and is protected by their decisions under the business judgment

In this situation, there was an incident where the three board of directors have had a personal interest in company and they themselves agreed to buy shares of stock of Green Med because they believed that Cheap Pharma cannot afford to buy the share of stock

These actions allowed the board of directors and management to amend the company’s charter and allowed shareholders four votes per share. The board of directors was also re-structured into classes, in which each class serves staggered three-year terms (Wheelen & Hunger).

Within two years, DecisionTech, Inc. had built a reputation as the top technology company in the country. They had a strong business plan that would lead them into the next stages of new technology and investors were lining up to get a piece. Furthermore, they had young qualified engineers submitting resume’s regularly in hopes of employment. However, after a while, their executive team developed internal conflict and was unable to lead this bright and promising company to the next stage. Word of these actions had circulated and the company had now become known for having personal political agendas and backstabbing; therefore, the Chairman of the board demanded change.

Evidence from this case suggests that the traditional Japanese corporate governance stance has started to shift in order to include some elements of the Anglo-American way of corporate governance. It appears that a final decision has been made to build Disney Sea Park (despite unattractive ARR, but attractive NPV/IRR and ACFR) not only for the potential profits reaped for the company but also due to their responsibility to keep uphold the interests of its stakeholders (which would include its parent company, stockholders, landowners, suppliers, creditors, the local communities and government), whose livelihoods would be directly affected by this critical decision.