Solving a Problem or Sounding the Alarm? Guidelines on Blowing the Whistle

Lynn S. Paine; Lara  Adamsons

Background Note | HBS Case Collection | June 2008 (Revised January 2012)

Solving a Problem or Sounding the Alarm? Guidelines on Blowing the Whistle

by Lynn S. Paine and Lara Adamsons

Abstract

Many of us will at some point in our professional lives encounter situations involving what we believe to be wrongful or injurious activities that may cause harm to innocent parties, our company, or the public. It may be necessary to bring the matter to the attention of someone who can do something about it—to engage in what is sometimes called "whistleblowing." This note outlines some factors that should be considered when that happens.

Keywords: Crime and Corruption; Ethics; Corporate Disclosure; Business Processes; Behavior;

Format: Print

5 pages

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Citation:

Paine, Lynn S., and Lara Adamsons. "Solving a Problem or Sounding the Alarm? Guidelines on Blowing the Whistle." Harvard Business School Background Note 308-005, June 2008. (Revised January 2012.)

How corporations govern themselves has become a matter of broad public interest in recent decades. Amid this many commentators and experts still disagree on such basic matters as the purpose of the corporation, the role of corporate boards of directors, the rights of shareholders, and the proper way to measure corporate performance. The issue of how shareholder interests should be considered in corporate decision making is particularly contentious. This article is a resource for understanding today’s key debates around governance and identifying the main areas in which changes are being called for. Many readers are grappling with these questions now or may have to address in the near future; in any case, the debates are sure to affect how business operates across the globe.

Ellen J. Kullman, the retired Chairman and CEO of DuPont, describes how she guided the storied science and technology company through a contentious proxy battle with activist investor Trian Partners, which acquired DuPont shares in 2013 and sought to break up the company. Trian’s pursuit of board seats led to a 2015 shareholder vote, which DuPont won under Kullman’s leadership. In a sweeping interview with Professor Lynn S. Paine, Kullman describes lessons from her experiences navigating the proxy contest that captured national attention as well as about working with your board, setting company strategy, leading a large corporation, evaluating time frames for shareholder returns, measuring stakeholder performance, assessing shareholder engagement, considering joining a new board and boardroom dynamics, and understanding how boards have changed over the years.

Case | HBS Case Collection | March 2018 (Revised September 2019)

China Vanke: Battle for Control (A)

Lynn S. Paine, Charles C.Y. Wang, Dawn H. Lau and Anthony K. Woo

In June 2016, the board of China Vanke, one of China’s largest and best-known private residential real estate developers, must vote on a proposed acquisition that is opposed by its largest shareholders, state-owned China Resources Co. and the lesser-known property developer and financial services company Baoneng. The case describes how Baoneng amassed enough shares in Vanke to become its largest shareholder, displacing China Resources in that position. In response to Baoneng’s unwelcome advance and in support of its “railway plus property” strategy, Vanke’s management has proposed the acquisition of a unit of Shenzhen Metro, the government-owned operator of Shenzhen’s underground subway. The proposed acquisition, to be financed by issuing shares, will make Shenzhen Metro Vanke’s largest shareholder and dilute the holdings of both China Resources and Baoneng. China Resources has publicly expressed misgivings about the transaction and the board’s handling of its announcement. With three out of the 11 board seats occupied by China Resources affiliates, and a two-thirds majority needed for the proposal to pass, the vote would determine the future of Vanke.

Keywords: China Vanke; China Resources; Hostile takeover; board of directors; shareholding structure; shareholder rights; asset restructuring; Corporate Governance; Governing and Advisory Boards; Valuation; Business and Shareholder Relations; Real Estate Industry; China;

Citation:

Paine, Lynn S., Charles C.Y. Wang, Dawn H. Lau, and Anthony K. Woo. "China Vanke: Battle for Control (A)." Harvard Business School Case 318-117, March 2018. (Revised September 2019.) View Details

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Solving a Problem or Sounding the Alarm? Guidelines on Blowing the Whistle

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