The instructor will distribute a corporate governance rating survey instrument (CG Rating Survey) to all students at the beginning of the session. The survey instrument was prepared by the instructor for the purpose of corporate governance rating of listed companies and it is currently in use in a number of locations. Please check the Blackboard Assignments section for further detailed instructions.
Each student will be assigned (by the instructor) one publicly traded company (preferably an S&P 500 firm) at the beginning of the session. This is the company the student will analyze and assess the corporate governance compliance and identify any weaknesses.
You will conduct research on recent corporate governance related articles about the S&P 500 company you have been assigned.
These sources may include the corporate website, the U.S. Securities and Exchange Commission EDGAR website, the NYSE, or the Wall Street Journal or other business periodicals (FT, Fortune, Forbes, Bloomberg, CNBC, etc.).
Please try to contact the reference librarian who will provide you with guidance regarding other sources JHU library has.
a- About the Corporate Governance Survey and Scoring project:
• This is an individual project.
• You may work as a group or individually as this will facilitate your understanding of the topic. The paper is individually graded.
• Individuals or teams may request meetings with the instructor as required to clarify any issues.
• The final project will be submitted via Blackboard by each individual student on due date.
The goal of this assignment is to conduct a corporate governance scoring survey, and provide the corporate governance assessment of a listed company based on the OECD principles of corporate governance.
The learning objective of this exercise is to understand how the CG Principles are operationalized.
Students will write a corporate governance assessment paper and provide recommendations. Papers will be individual.
This paper is worth 20 points towards the final grade.
b- Guidance on structural details of the project:
Write your paper in MEMO format to the investment committee at your company.
The paper should not exceed the maximum of 6–8 pages, excluding appendices.
There is no limit on the number of appendices you may provide.
Try to be concise in your report. Avoid using language directly from any website; make sure you properly reference all statements from any sources.
Summarize the information in your own words, and provide references when necessary.
Please use the following structure for your Corporate Governance Scoring, Rating, and Assessment paper:
The Corporate Governance Survey Project is 20 points total towards your final grade.
Details are as follows:
i) Executive Summary/Introduction (2 points): (1–2 pages maximum) Using the data you have collected from the company website and other publicly available information, prepare the executive summary that should clearly state the objectives, background and the main findings of your corporate governance assessment paper on the selected company.
ii) Company Background (1 point): (1 page maximum) Prepare a brief, one page maximum review of the company background, important issues reported in its US SEC filings, and other information you have collected. You may provide the following information in an attached exhibit, with proper references provided.
(1) The company organization, its values, vision, mission, products (keep it very short);
(2) Corporate financial information, revenues, capitalization, stock price, ROE, ROI, PE ratio, Book/Market ratio, its management team and corporate governance practices. Using a table in the appendix, discuss some of the highlights. (prepare a short table of information and attach it to the end in an appendix);
(3) Do not simply copy and paste from company web site. Summarize the information in your own words.
(4) Make sure you provide references properly. Provide the list of references at the end of the report.
iii) The Written Report on CG Survey Results (10 points): (2–3 pages maximum) Using the 100-question CG survey instrument you are provided, determine your survey findings and calculate the CG score. Using the guidance in the provided survey instrument, rank this company (from 1–5) based on your survey score. A suggested structure is as follows:
(1) Process the 100 questions in the Excel spreadsheet survey, summarize your findings, provide charts and exhibits. Try to keep it short.
(2) If and when appropriate, explain why some of the survey questions may or may not be applicable.
(3) Discuss your CG Scoring findings. Copy and paste the summary table and the chart into your report (from the top of the spreadsheet that automatically populates the results). (DO NOT INCLUDE THE COMPLETED EXCEL SPREADSHEET SURVEY WITH YOUR REPORT)
(4) Discuss specifically the corporate governance Strengths, Weaknesses, Opportunities and Threats (SWOT), and how some of the observations you have made relate to pertinent topics covered in the course.
• If you source any data from the company web site, provide reference.
• For any such information, you may paraphrase and write it in your own words.
iv) Findings and conclusions (5 points): (2 pages maximum) Provide a small summary table of findings and discuss the SWOT. Discuss any of the available corporate governance mechanisms that are relevant to the chosen firm and the advantages and disadvantages of those mechanisms. While discussing your findings, try to bring in academic literature and/or provide practical evidence to support your argument.
• Discuss the main CG issues that you identified given the theoretical background.
• The conclusions should summarize the main findings and discuss their implications for the particular firm, investors, regulators and the economy.
• Your recommendations should have three to five specific points the company board could do to improve a situation you have determined in the company.
v) Attachments (2 points): Include references, charts figures and/or tables as evidence to support your report.
vi) Class Presentation/Discussion (2 points): This is part of class participation, in addition to the written report.
At the beginning of the 7th lecture period, we shall go around the class. Each student will discuss a very brief summary of their papers within a maximum of 3–5 minutes (OR LESS, DEPENDING ON CLASS SIZE) to present the findings and lessons learned. There will be some time for Q&A and comments session. The instructor will grade the quality of the presentation and delivery of the message. This is due Week 7.
Class discussion/Presentation of your findings is considered as part of the “Class Participation” and will be graded accordingly.
• Instructor will require students to turn in their CG score and some other data for their company in an Excel spreadsheet. The instructor will collect this data, and prepare a summary of the class findings of the ratings for discussion in class on Week 7.
• Instructor may decide to make adjustments to the presentation schedule depending on class size and time limitations.
- For class discussion, summarize your paper in a maximum of 5 bullet points.
- The final written report is due two to three days following the class discussion on Week 7. Students will be given further instructions on first day of class.
• The final company CG scoring and assessment report must be submitted via Blackboard.
Sample Solution