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• Case | HBS Case Collection | April 2020

  The Board's Role in Refocusing Bahrain Development Bank

  Paul M. Healy and Alpana Thapar

  In March 2016, Bahrain Development Bank’s (BDB) existing board term came to an end and Khalid Al Rumaihi was appointed the new chairman. Determining a need for change, he immediately overhauled the board and replaced BDB’s long-standing CEO. The new board quickly concluded that BDB needed to refocus on its core business of lending to small and medium-sized enterprises (SMEs) and selected an experienced Bahraini corporate banker to implement this strategy. However, within six months, the new CEO resigned and the board had to once again look for a replacement. Expanding their search globally, they found Sanjeev Paul, a Singaporean with immense experience in SME lending, who was appointed CEO of BDB in May 2018. Over the next 20 months, with the board’s support, Paul headed an organization-wide revamp aimed at enabling the bank to refocus and achieve its mandate of supporting SMEs. By December 2019, the changes started to pay off; after three years of losses, BDB turned its first profit. However, Paul and the board recognized their work was far from over. BDB’s cost structure was higher than that of competition, they paid below-market salaries, and had an outdated core banking system. As Al Rumaihi looked ahead to his second term as chair, he wondered how the board could help Paul and his management team in addressing these challenges.

  Keywords: board of directors; Governing and Advisory Boards; Organizational Change and Adaptation; Change Management; Banking Industry; Bahrain;

  Citation:

  Healy, Paul M., and Alpana Thapar. "The Board's Role in Refocusing Bahrain Development Bank." Harvard Business School Case 120-099, April 2020.  View Details

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• Article | Accounting Horizons | March 2020

  Voluntary, Self-Regulatory, and Mandatory Disclosure of Oil and Gas Company Payments to Foreign Governments

  Paul M. Healy and George Serafeim

  Concerns about high rates of government corruption in resource-rich countries have led transparency advocates to urge oil and gas firms to disclose payments to host governments for natural resources. Transparency, they argue, can increase government accountability and mitigate corruption. However, we find a low frequency of voluntary disclosures of payments by oil and gas firms and negative stock price reactions for affected firms at the announcement of regulations mandating disclosure. This suggests that sample firm managers and their investors perceive that such disclosures generate private costs, despite any public benefits. We document that industry self-regulation has generated information to substitute for the gap in voluntary company disclosure and that such disclosures are accompanied by lower country corruption ratings. This suggests that collective action could be an effective way for companies to manage the private costs of disclosure and respond to public pressure for transparency that could provide public benefits.

  Keywords: oil ＆ gas; corruption; transparency; self-regulation; industry self-regulation; regulation; disclosure; disclosure regulation; Energy Sources; Crime and Corruption; Corporate Disclosure; Governing Rules, Regulations, and Reforms; Energy Industry;

  Citation:

  Healy, Paul M., and George Serafeim. "Voluntary, Self-Regulatory, and Mandatory Disclosure of Oil and Gas Company Payments to Foreign Governments." Accounting Horizons 34, no. 1 (March 2020): 111–129.  View Details

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• Working Paper | 2020

  Directors' Perceptions of Board Effectiveness and Internal Operations

  J. Yo-Jud Cheng, Boris Groysberg, Paul M. Healy and Rajesh Vijayaraghavan

  Keywords: corporate governance; boards of directors; Corporate Governance; Governing and Advisory Boards; Performance Effectiveness; Perception;

  Citation:

  Cheng, J. Yo-Jud, Boris Groysberg, Paul M. Healy, and Rajesh Vijayaraghavan. "Directors' Perceptions of Board Effectiveness and Internal Operations." Working Paper, February 2020. (Under revision at Management Science.)  View Details

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