Who should take the course?

This course should be of interest to most, if not all, students. Many of you will serve as a CEO or other senior executive working with a board of directors. Others will be entrepreneurs needing to build a board for your company as a private entity and later as a public company. Still others will be investors or investment professionals needing to assess the governance of the companies you invest in. And of course many of you will serve on one or more boards during your careers, either as an investor, executive, or independent director. 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;
• different theories of corporate governance and their practical implications;
• 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, venture-backed, and family-controlled firms. Roughly two-thirds of the sessions concern companies based in the US; the other third are about companies based in other parts of the world, including Europe, the UK, the Middle East, South Africa, and Latin America.

Throughout the course, we will explore differing conceptions of “good governance” and what they mean in practical terms 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 many recent IPOs such as the Snap, Inc., offering. We will also examine contemporary debates about shareholder activism, board diversity, board leadership, executive compensation, environmental and social factors in governance, hostile takeovers, and the market for corporate control. We will consider the role of stakeholders other than shareholders in corporate governance and examine new corporate forms such as the public benefit corporation or B-Corp. 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 observes.

What is the course content and structure?

The course has five main modules and a short concluding module. The modules are organized around the following topics: the purpose of governance, including the role of shareholders; building an effective board; the board-CEO relationship, including the board’s role in hiring, firing, and compensating the CEO; boardroom dilemmas in M&A and other change-of-control transactions; the board’s oversight role in areas such as financial reporting, compliance and culture, sustainability and ESG; 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 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 will count for 50% of the grade. A final exam will account for the other 50%.

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