Case studies by Stanford GSB faculty that illustrate concepts and lessons in corporate governance.
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CG20B
Sharks in the Water, Battling an Activist Investor for Corporate Control (B)
David Larcker, Brian Tayan
2010
This case is a follow up to CG-20A, and explains the actions taken by Tarco in response to threat from activist investor Barracuda. The case explains how the company relied on an analysis of its shareholder base and predictive proxy voting to inform its…
CG18
Baker Hughes, Foreign Corrupt Practices Act
David Larcker, Brian Tayan
2010
In 2002, Baker Hughes was accused of violating the Foreign Corrupt Practices Act (FCPA). This case describes the actions taken by the company in response to those accusations. These include hiring a third-party law firm to undertake an independent…
CG19
Equity on Demand, The Netflix Approach to Compensation
David Larcker, Allan McCall, Brian Tayan
2010
Netflix was among a small group of Silicon Valley companies to emerge from the technology bubble of the late 1990s a clear winner in terms of growth, market share, and profitability. That Netflix was able not only to prevail over this competition but also…
CG20A
Sharks in the Water, Battling an Activist Investor for Corporate Control (A)
David Larcker, Brian Tayan
2010
In July 2006, Barracuda became the largest investor in Tarco International. In a meeting with management, Barracuda’s managing director advised that strong measures needed to be taken to improve operating performance. If management failed, Barracuda…
CG21
Multimillionaire Matchmaker, An Inside Look At CEO Succession Planning
David Larcker, Brian Tayan
2010
This case takes an inside look at CEO succession planning at Energy Corp. The case provides an overview of various models of succession planning, including external search, COO appointment, a horse race, and the inside-outside model. The case then…
CG17A
Royal Dutch/Shell, A Shell Game with Oil Reserves (A)
David Larcker, Robert Lawson, Brian Tayan
2009
In January 2004, the Royal Dutch/Shell Group of Companies announced that it would reduce its estimate of proved oil reserves by nearly 4 billion barrels, or 20 percent. The announcement set off a series of events, including a drop in the company’s share…
CG17B
Royal Dutch/Shell, A Shell Game with Oil Reserves - Governance Overhaul After Scandal (B)
David Larcker, Robert Lawson, Brian Tayan
2009
Following the revelation that the Royal Dutch/Shell Group of Companies had overstated its proved oil reserves by over 4 billion barrels, company officials announced dramatic changes to the company’s organizational structure and governance system. These…
A198
Financial Restatements: Methods Companies Use to Distort Financial Performance
Madhav Rajan, Brian Tayan
2008
Over the last 10 years, the number of publicly traded companies that have had to restate financial results has risen dramatically. Regardless of whether the restatements stemmed from the aggressive application of accounting standards or the need to…
CG11
Models of Corporate Governance. Who's the Fairest of Them All?
David Larcker, Brian Tayan
2008
In 2007, corporate governance became a well-discussed topic in the business press. Newspapers produced detailed accounts of corporate fraud, accounting scandals, excessive compensation, and other perceived organizational failures—many of which culminated…
CG13
Attention Shoppers, Executive Compensation at Kroger, Safeway, Costco and Whole Foods
David Larcker, Brian Tayan
2008
Retail grocery sales represent a significant portion of the U.S. economy. The industry was highly competitive, with companies operating on low gross and net margins. As a result, grocery stores were generally under significant pressure to reduce their…
A195
The Walt Disney Company: Investor Communications Strategy
Maureen McNichols, Brian Tayan
2007
As the chief financial officer of The Walt Disney Company, Tom Staggs was responsible not only for the financial management of the company, but also for the communication of the company’s financial and strategic objectives to its investor base. Because…
A193
Earnings Conference Calls, Hewlett-Packard Company
Maureen McNichols, Brian Tayan
2007
The case study asks students to evaluate the role that the quarterly conference call plays in a company’s overall communications strategy with investors. In particular, students are asked to assess what additional information they can learn from the…
A192
The Coca-Cola Company: Accounting for Investments in Bottlers
Ron Kasznik, Brian Tayan
2007
In 2001, accounting regulators, especially those in the U.S., began to reconsider the rules of consolidation with a move toward a requirement based on “control,” with much less consideration of the size of the equity stake. The fundamental accounting and…
CG10
10b5-1 Plans, Mortgaging a Defense Against Insider Trading
David Larcker, Brian Tayan
2007
In 2006, David Zucker, chief executive officer of Midway Games, came under fire for selling a significant amount of Midway stock just weeks before a precipitous decline in the company’s share price. One year later, Angelo Mozilo, chairman and chief…
A194
AMB Property Corporation, Financial Reporting in the REIT Industry
Maureen McNichols, Brian Tayan
2007
AMB Property Corporation set out to be a leader in corporate governance and financial reporting. The company, a publicly traded real estate investment trust (REIT) that acquires, develops, and owns industrial properties, believed that its governance and…
A196A
AOL Time Warner (A): Accounting for Goodwill
Ron Kasznik, Brian Tayan
2007
This case asks students to review the impact of SFAS 142, Goodwill and Other Intangible Assets, in the context of the AOL Time Warner merger. Under SFAS 142, companies were required to perform periodic testing to determine whether economic goodwill had…
A187
Halliburton Company, Accounting for Cost Overruns and Recoveries
Maureen McNichols, Brian Tayan
2007
In July 2002, a legal watchdog group, Judicial Watch, announced that it was suing Halliburton Company for overstating revenues during the period 1998 to 2001. The group’s contention was that Halliburton used fraudulent accounting practices to boost…