Why different mix of directors and skills sought for the board. Discuss
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Business Ethics
Case Studies
CASE STUDY (20 Marks)
Governance gurus are savvy enough not
to reduce diversity to simple "ought to dos" but also make the case
for why it matters. The ability to reflect the markets served and bring a
variety of decision making styles and perspectives to the boardroom were points
made in discussing traditional gender and ethnic diversity, though I heard a
new one from DuPont CEO Ellen Kullman: "passport diversity," meaning
directors from other countries, bringing an international point of view.
Pragmatism is also appreciated: Kullman pointed out those jetlagged international
directors who are only coming in for brief visits driven by board meetings
don't end up returning high value. Throughout the sessions, the need for board
directors to have political acumen as well as subject matter
expertise and leadership experience was
noted, first by Joe Grundfest, a Stanford professor. In order to balance the
competing interests cited above and still fulfill the duties of a board
director, Grundfest and others made the point strongly that directors today need
some political abilities to fully meet the job's requirements. Captured in the
single question of "should board directors speak to the media?"a role
traditionally reserved for management there was a marked shift in several
discussions signaling a new belief that board members could be valuable
spokespeople in certain circumstances.
Answer
the following question.
Q1.
Why different mix of directors and skills sought for the board. Discuss.
Q2.
Give an overview of the case.
CASE STUDY (20 Marks)
Stefano is a freshman at a small
college called Hinchley University. Although Hinchley doesn’t recognize Greek
life, there are plenty of nationally recognized fraternities and sororities off
campus. Even before Stefano applied to college, he knew he wanted to rush a fraternity.
His father was in a fraternity and always told Stefano that he gained valuable
life lessons out of his experience that shaped who he became as an individual.
When Stefano gets to Hinchley, however, he is disappointed that his father’s
fraternity doesn’t have a chapter at his school. He forgets about rushing a
fraternity until winter quarter comes around and fraternities host rush week. Stefano
decides to attend rush week to see if he can find an organization that fits his
mold. He’s looking for fraternity brothers who care about academics as much as
socializing and who walk the talk supporting worthwhile philanthropies. At the
end of rush, Stefano thinks he’s found just what he wants in a fraternity
called “Alpha Iota.” Alpha Iota extends Stefano a bid and he accepts. Soon,
however, Stefano finds some of his fraternity brothers are not the kind of guys
he really wants to hang around with. While a lot of the members are great,
several others both publically and privately show disrespect towards other
fraternities and all women on and off campus. In addition, there is hostility
between the brothers themselves that Stefano didn’t see during rush. He soon
finds out it may be from hazing the pledges are forced to undertake. Only a
couple days into his pledge period, on a Monday night, Stefano is locked in a
dark basement with his pledge brothers. First, they are instructed to finish a
keg of beer amongst the 25 pledges. After this, they are forced to stay awake
all night, still locked in the basement, by blasting music and active brothers
going around slapping pledges awake who fall asleep. Stefano finds himself
torn. He’d like to belong to a fraternity so that he has a good social network
on campus. But should he continue to go through the pledge period to join this
exclusive club, even though he doesn’t respect some of the members and he
doesn’t feel comfortable with the hazing?
Answer
the following question.
Q1.
Do you believe the desire to be in a Greek organization—even one that
hazes—should outweigh a college student’s moral conscience? Comment
Q2.
If you were forced to do something you didn’t want to do to join an exclusive
organization, would you do it? Discuss.
CASE STUDY (20 Marks)
Share price rigging is rampant during
bull runs. To see how it happens, let’s check the modus operandi. The main
format which evolved during Harshad Mehta’s time, involves three participants –
promoters, operator and a broker syndicate. There are ancillary participants like
fake billsellers, and also perhaps unscrupulous auditors and officials. The
promoter first finds an operator or vice versa. The promoter should be
interested in bumping up the share price, the motivation for which could vary
from the basic – offloading his stake at a high price to gullible retail
investors – to the more advanced – which comprises complex needs like getting better
validation for a GDR issue or in an M & A. it works like this: the
promoters commit to the operator not to sell the market while the operation is
on. He gives about 10% of his stake to the operator of companies affiliated to
the brokrs’ syndicate. The syndicate normally comprises 610 brokers, often
dispersed in different cities so as not to arouse suspicion of SEBI or the
stock exchange. Their role is to do circular trading which works like this: say
broker A sells to B at Rs. 4.5; will sell to C at Rs. 4.65 and so on. The
trades are designed to generate the impression of large liquidity. After taking
prices to certain level, ‘news flow’ is created. The news is typically about
large orders and capacity expansion. These days it is often about an
acquisition or restructuring. Also, financial results need to show improvement.
This is done by buying revenue. There are agents who sell fake bills at a
certain commission, which could be between 0.5% and 10%. ET has learnt this
market tends to boom at the same time as share markets. After the price reaches
the target, the syndicate exits. The gains are split between the promoter,
operator and syndicate members. In this artificially created Bull Run, there is
a new element: people trying to convert black money to white.
Answer
the following question.
Q1.
Discuss the unethical issues in this case.
Q2.
What remedial measures do you suggest in the above case?
CASE STUDY (20 Marks)
Frank is a college junior at a small
private university. Before coming to college he had a girlfriend for two years,
ending abruptly because they were going separate ways. His attitude coming to
college was to remain single, grow academically and professionally, and enjoy
youthful experiences. In his freshman year, Frank found that the culture at his
college largely matched what he was looking for. Hooking up was very common,
and long term relationships were rare. During his first year at school, Frank
saw a lot of different women and had sex with several of them, rarely more than
once or twice. He had some good experiences with women who he would have liked
to pursue longer, but he just didn’t think the culture allowed for it. All the
students seemed to be focused on bettering their future. They were academically
and professionally driven, not driven by relationships and finding love. Some
of Frank’s peers explicitly said they didn’t have time for a romantic relationship,
and had no interest since they didn’t know what state they would be living in
after graduation. At the beginning of his junior year, Frank got involved in an
uncommitted sexual relationship with Susan, a girl he always had been
interested in getting to know better. After hooking up once, they both
discussed how they weren’t looking for a relationship but enjoyed each other’s
company. Frank and Susan continued this exclusive, hookup relationship for the
first half of the semester. While they both enjoyed time with one another, the
uncommitted relationship ended unexpectedly when Susan wanted more and Frank
was still unsure he was ready to fully commit. Frank went back to his routine random
hookups, but he soon realized that he wasn’t enjoying them anymore. There was
no long term fulfillment and growth that he had started to feel with Susan.
Frank stopped hooking up with girls randomly, and instead started searching for
something deeper. He spent the rest of the quarter not hooking up with anyone
and realizing how difficult it was to find a relationship in college, especially
after he had built a negative reputation after hooking up with so many women
around his small college campus. Frank’s friends approached him one day in an
“intervention.” They were genuinely concerned about him because he was acting
so different than usual and seemed depressed. They told him that he was in a
funk after his time with Susan. He needed to get back out and hookup with girls
again, so that all would be normal again.
Answer
the following question.
Q1.
Should Frank be hooking up with more girls? Should he not be? Discuss
Q2.
In the college hookup culture, is the choice to not hookup just as acceptable
as the choice to hookup? Why or why not? Comment
Assignment Solutions, Case study Answer sheets
Project Report and Thesis contact
ARAVIND – 09901366442 – 09902787224
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