Suchergebnisse

ABSTRACT
This case helps students understand the challenging decisions faced by a company's board of directors (i.e., survival of the company) and the legal risks directors experience when business fails. The case is based on actual court proceedings involving a company's liquidator taking legal action to restrict the tenure of the directors. Key judgments facing the directors and disputed by the liquidator include the valuation of financial statement assets and the preparation of the financial statements on a going-concern basis. The case also addresses directors' relationships with the company's external auditor/advisors. Students are asked to consider whether the directors acted responsibly in relation to their stewardship of the company and whether the directors should be held accountable and sanctioned following the company's collapse. The case adopts a novel courtroom setting, requiring students to role-play by adopting the characters and presenting the plaintiff's and defendants' lawyers' arguments, and the judges deciding the case.

AbstractResearch question/issueCorporate governance codes of practice require non‐executive directors (NEDs) to challenge and question managers. Prior literature and best practice guidance remain silent on the precise meaning of, and on how directors might execute, "challenge", and how management might respond. We explore the ways in which NEDs challenge, question, and dissent during board meetings, and how managers respond. We observe, audio‐record, and video‐record three boards during nine board meetings. Our boards are unique in holding part of their meetings in public and part in private.Research findings/insightsOur dataset comprises 418 questions and 510 answers. We develop a typology of NEDs' challenge/questions comprising six categories/48 subcategories and managers' responses/answers comprising eight categories/69 subcategories. Our findings support the assertion that NEDs may be reluctant to offer moderate (i.e., constructive) challenge in public. We find significant differences between the level of dissent and the types of answers offered in public versus in private. We find an association between the type of question asked and the type of answer provided. Who asks and answers questions varies significantly in public versus in private, as do the questions and answers by each board.Theoretical/academic implicationsOur empirical findings suggest board behavior varies in the presence of an audience of stakeholders. In public, boards go through the motions by engaging in the performativity of governance, while more substantive governance occurs in private.Practitioner/policy implicationsWe show that regulatory calls for robust challenge by NEDs have not been met, at least judging by the three boards in our study. There is a lack of guidance and advice on how NEDs should exercise challenge and how managers might respond.