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INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE Executive Post Graduate Programme in Management Course Outline Course Code and Course Title

SM-06 / Corporate Governance

Introduction These modern corporations have multiple stakeholders with varying level of influence. The corporations need to adopt an ethical approach in balancing rights and relationships among organizational stakeholders. Any failure in balancing the relationship may lead a failure which disastrous not just for the company but also for the society. While corporate social responsibility focuses the interests of the society corporate governance focuses on protecting the interests of the shareholders. Learning Outcomes/Course Objectives The specific learning outcomes of the course are • To understand the concept of ethics as applied to the corporate bodies and critically examine the issues of ethics in corporate practices • To develop insights into the conceptual framework of corporate governance, and try to evolve a global view on the contemporary practices of corporate governance • To study the legal and, institutional and regulatory framework of corporate governance in general and India in particular • To identify the best practices in board composition and structure and understand the impact of ownership structure on corporate governance • To gain key insights into corporate social responsibility and understand how the socially responsible practices will lead to corporate sustainability Textbooks and Learning Materials Text Book Tricker, (Bob) Corporate governance: Principles, policies, and practices. 3rd Edition, Oxford University Press India Reference Book(s) 1. Monks.R. and Minnow.N. (2011), Corporate Governance, 5th Edition, John Wiley & Sons Mallin C.A. (2013) Corporate Governance.5th Edition, Oxford University Press India.

Additional Readings RM 1. ‘Ethical Frameworks for Management’, by Kenneth E. Goodpaster RM 2. ‘A Note on Five Traditional Theories of Moral Reasoning’, by Pat Werhane RM 3.Handy, C. (2002). What is a business for? Harvard business review, 80(12), 48-55. RM 4.Chandler Jr, A. D. (1992). What is a firm? A historical perspective. European Economic Review, 36(2), 483-492. RM 5.Yoshikawa, T., & Rasheed, A. A. (2009). Convergence of corporate governance: critical review and future directions. Corporate Governance: An International Review, 17(3), 388-404.

RM 6.CA.Raiborn, & P. Dinah (1990) Corporate codes of conduct: a collective conscience continuum, Journal of business Ethics, 9(11) 879-889 RM 7. Gatekeeper Failures: Why Important, What to Do Gatekeepers: The Professions and Corporate Governance by John C. Coffee- Review by: M.B. Fox, Michigan Law Review, 106(6), 2008. 1089-1110 RM.8 Pozen,R.C. (1994). Institutional investors: The reluctant activists. Harvard Business Review, 72(1), 140-149. Case1: CIAM: Home-Grown Shareholder Activism in France, by Charles Wang, Tonia Labruyere, Vincent Dessain HBS Product # 120072-PDF-ENG Case 2: Accounting Fraud at WorldCom, by R.S. Kaplan and D. Kiron HBS Product # 104071-PDF-ENG Case 3: The fall of Enron by P.M. Healy and K. G. Palepu, HBS Product # 109039-PDFENG. Case 4: Infosys Limited: Governance Imbroglio, by J Ramachandran, Diptiprakash Pradhan IMB805-PDF-ENG

Pedagogy This course would be thought through a combination of readings, case discussions and lectures with intent to cover varied perspectives. Students are expected to read the textbooks or other assigned readings outside of class and participate in the critical evaluation of the material through class discussion. Evaluation Components/Assessment of Student Learning Assessment Tool Quizzes End term Exam

Percentage 20 % 50 %

Class Participation (Mainly Case Analysis)

15%

Project

15%

Description These components are required to check and evaluate the students’ understanding of concepts and application of appropriate tools and techniques. Students are expected to read the material/do the case analysis before coming to the classes it would provide them opportunities to explore diverse perspectives for a business problem. This facilitates students to demonstrate the ability to integrate the information and the sk ills accumulated in their course with the applied research in the respective areas. This also gives them a chance to show their skills in oral and writing communication.

Session Plan Sessi on No 1

Module

Overview

Topic

Introduction to Ethics and evaluation of business , Corporate Ethics and Stakeholder analysis

Chapter No. / Reading material / Cases RM1, RM2, RM 3 & RM4, Chapter 4

2

3

4

5

Evolution of Corporate Governance and theories

Emergence of Modern CorporationHistorical Perspective -Ownership Structure of Corporations across the globe Managing public limited firms – Agency Theory, Stewardship theory & Stakeholder Theory International Global CG models -– Changes in eighties Corporate Governance Cadbury Report- Hampel Report and OECD Committee Recommendations – SOX Act.Convergence of CG & future trends Corporate Governance Board Functions, Activities & Mechanisms – Responsibilities, Board Leadership & Internal Top Management - Code of Conduct, Whistle Blowing

Chapter 1, 2 , 3 & 4

Chapter 6 & 12, RM 5

Chapter 4, 7, 13,14, 15, 16 & 17 Case 1 Chapter 8, RM 6 Case 2

6

Corporate Governance External Governance Mechanism Mechanisms Regulators, Legal Systems, Capital Market External Access and Gate Keepers

Chapters 5 RM 7 Case 3

7

Institutional Investors & Shareholder activism –- Corporate Control ActivitiesProxy advisory firms and Corporate Governance Ratings Corporate Governance Evolution of Indian Business Environment, in India Changes in nineties, CG Committees Corporate Social Corporate Social Responsibility & Responsibility Corporate Governance - Evaluation - Modern Practices- UN Global Compact, Sustainable Practices, - Triple Bottom line Reporting

Chapter 10 RM.8

8

Chapter 12 Case 4 Chapter 9

Additional Instructions Class Participation - Students would be assessed on the basis of the discussion points and how he/she built the discussion during the class. This is not about the number of times the student spoke during the session but the relevancy of the point to the discussion and how constructive the students is argument building...