Business Strategy and Corporate Governance

Abstract

This course uses “business school” case studies to examine the business strategies and corporate governance of several well-known organizations. The course will focus on accounting, finance, legal, and regulatory issues that contributed to corporate governance and business failures. We will examine case studies for Airbnb, Theranos, Uber, WeWork, FIFA, and Hermitage.

Objective

The class focuses on the design of corporate governance of companies that face distinct challenges often intrinsically linked to them being high tech, disruptive businesses. It is an inherent feature of high-tech companies to push the boundary with respect to both business models and technical solutions into areas, where regulation is scant, inexistent, or maladapted. Corporate governance therefore faces particular challenges of how to manage legal exposure. At the end of this class, students will become familiar with legal and business issues related to different types of corporate governance challenges. The case study approach will encourage students to examine different legal, business and ethical challenges in the context of high profile and real-world settings. This approach will also encourage students to work collaboratively on different types of projects.

Content

Class No 1 Airbnb Case Study: Airbnb During the Covid Pandemic: Stakeholder Capitalism Faces a Critical Test (Esty & Ciechanover HBS 2021) Readings: Business Roundtable, Statement of Corporate Purpose (2019) World Economic Forum, Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution (2020) Coates & Srinivasan, Corporate Governance (HBS 2018) Key issues: Corporate purpose, balancing interests of different stakeholders, and corporate governance during Covid. Video: The Evolution of Airbnb’s Business Model: https://www.youtube.com/watch?v=9E-pWZ9KZ6w&t=27s Background Reading: Gallagher, The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions … and Created Plenty of Controversy (2018) Class No 2 Theranos Case Study: Theranos: The Unicorn that Wasn’t (Fuller & Masko HBS 2019) Readings: Bainbridge & Henderson, Why Boards Fail, Chapt. 4, Outsourcing the Board (2018) Key issues: Corporate governance and start-ups, role of the board of directors, role of lawyers (advisors vs. hired thugs), and regulatory compliance. Video: The Dropout (Hulu 2022) 20/20 Documentary, The Dropout (2017) Background Reading: Carreyrou, Bad Blood: Secret and Lies in a Silicon Valley Startup (2018) Class No. 3 Uber Case Study: Uber in 2017: One Bumpy Ride (Srinivasan, Lorsch, & Pitcher 2017) Readings: Larcker & Tayan, Governance Gone Wild: Epic Misbehavior at Uber Technologies (Stanford Rock Center 2017) Key Issues: Corporate governance and start-ups (VC controlled), disruption versus disrespect for legal rules, corporate culture (managers behaving badly), and challenges brought on by gig economy. Videos: The Uber Story (Prime Video 2019) Background Reading: Isaac, Super Pumped: The Battle for Uber (2019) WeWork Case Study: The Harder We Fall: The We Company’s IPO Fiasco (Markovich & Meagher 2021) Readings: Lietz & Bracken, Why WeWork Won’t (HBS 2019) Key Issues: Corporate governance in start-ups, fiduciary obligations of controlling shareholders, identifying controlling shareholders, and standard of review in related-party transactions. Video: WeCrashed (Apple TV 2022) Background Reading: Wiedeman, Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neumann and WeWork (2020) Class No. 4 FIFA Case Study: FIFA: The Beautiful Game and Global Scandal (McMillan & Gandz Ivey 2015) Readings: Donatiello, Larcker & Tayan, What Can For-Profit and Nonprofit Boards Learn from Each Other About Improving Governance (Stanford 2015) Key Issues: Corporate governance and non-profits, fiduciary duties of directors of non-profits, and differences between for-profit and non-profit boards. Video: FIFA Uncovered (Netflix 2022) CBS News, FIFA Corruption Scandal https://www.cbsnews.com/video/fifa-corruption-scandal/ Background Reading: Bensinger, Red Card: How the U.S. Blew the Whistle on the World’s Biggest Sports Scandal (2018) Class No. 5 Hermitage Case Study: The Hermitage Fund: Media and Corporate Governance in Russia (Dyck 2003) Readings: Rock Center for Corporate Governance, Models of Corporate Governance: Who’s the Fairest of Them All? (2008) Key issues: Corporate governance and shareholder activism (role of minority investors in monitoring corporate activity), comparative foreign corporate governance, different methods for insiders to extract corporate value, internal versus external controls, and challenges of doing business in foreign countries. Video: Browder, How I Became Putin’s No. 1 Enemy (Aspens Institute 2015) https://www.youtube.com/watch?v=XpAqzIQffqo Background Reading: Browder, Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice (2015)

Resources