Corporate Governance and Boards of Directors - Harvard Business School MBA Program

Corporate Governance and Boards of Directors

Course Number 2010

Professor Lynn S. Paine
Spring; Q3Q4; 3 credits
28 Sessions

Who should take the course?

This course should be of interest to most, if not all, students. Some of you will find yourselves serving as a CEO or other senior officer working for a board of directors. Others of you will be entrepreneurs needing to build a board for your company as a private entity and later as a public company. And of course many of you will serve on one or more boards during your careers. The goal of the course is to prepare you to deal with all of these situations, as well as to be an informed shareholder.

What are the course objectives?

The primary purpose of the course is to develop your understanding of corporate governance and the functioning of boards and, importantly, to equip you to work with boards and to serve as a director. In the course, we will examine

  • the complex dynamics among boards, executives, and shareholders;
  • the changing rights and powers of shareholders;
  • the work that boards do and the critical decisions they make;
  • the legal, financial, managerial, and behavioral issues that directors must contend with in order to be effective;
  • the classic dilemmas that boards confront;
  • the costs and rewards of board service and the challenges faced by individual directors.

The course considers these issues in the context mainly of listed companies, though we will also examine the governance of private companies such as private equity and family-controlled firms. Roughly two-thirds of the sessions concern companies based in the US; the other third are about companies based in Europe, Asia, and other parts of the world. (Materials set in the Middle East, Africa, and Latin America are also under development and may be included.)

Throughout the course, we will explore differing conceptions of “good governance” and what they mean for boards, executives, and companies. We will consider, for instance, the implications of departures from the long-standing norm of “one-share, one-vote” as seen in IPOs such as, most recently, the Snap, Inc., offering. We will also examine contemporary debates about shareholder activism, proxy access, the use of staggered boards, hostile takeovers, and the market for corporate control. The course will give students an inside look into the dynamics of the boardroom, a realm that is generally opaque and often misunderstood by outside observers.

What is the course content and structure?

The course has six modules of four to five sessions each. The modules are organized around the following topics: understanding shareholders; building a board; the board-CEO relationship; dilemmas in the board room; the board’s oversight role; and the challenges of succeeding as a director.

The class sessions will involve case discussions, role-playing exercises, and other activities. We expect to have guests associated with the case materials in a number of sessions.

What are the course requirements?

The basic learning for the course takes place through preparation and participation in class discussion. Thus class participation �" quality as well as frequency and your contribution to moving the discussion forward �" will count for 50% of the grade. A final exam will account for the other 50%.