Who should take the course?

This course should be of interest to most, if not all, students. Many of you will be entrepreneurs building and working with a board of directors as you create and grow your company. Others will join private equity or venture capital firms where you will serve on the boards of the firm’s portfolio companies. Still others will be consultants or advisors to boards, or investment professionals needing to assess the governance of companies you invest in. Over the longer term, many of you will serve as a CEO or other senior executive working with your company’s board. 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 for these roles, as well as to be an informed shareholder.

What will you learn?

For many students, boards of directors are a “black box.” Little is known about their critical role and functions, let alone their internal workings. This course seeks to dispel the mystery. Through cases that put you in the shoes of executives, directors, shareholders, and other players in the corporate governance ecosystem, you will learn about

• the work that boards do and the critical decisions they make;
• how boards select company leaders, shape strategy, and oversee performance;
• 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 legal, financial, managerial, and behavioral issues that directors must contend with;
• the classic dilemmas that boards confront;
• the costs and rewards of board service and the challenges faced by individual directors.

We will examine these issues in the context of both private and publicly-traded companies, and at different stages of a company’s development—from startup to mature listed company. Our cases include private equity, venture-backed, and family-controlled companies, as well as companies with a large diversified shareholder base. Roughly two-thirds of the sessions concern the boards of US-based companies; the others 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 practice. We will consider, for instance, departures from the long-standing norm of “one-share, one-vote” as seen in many recent IPOs. We will also examine contemporary debates about shareholder activism, board diversity, board leadership, executive compensation, environmental and social factors in governance, hostile takeovers, and director liability. We will consider the role of stakeholders other than shareholders in corporate governance and examine new governance structures such as the public benefit corporation or B-Corp and the hybrid structure adopted by OpenAI.

How is the course structured?

The course has five main modules: (1) the purpose of governance, including the role of shareholders, management, and the board; (2) building an effective board, including director selection and board dynamics; (3) the board’s role in ensuring effective leadership, including hiring, firing, and compensating the CEO; (4) the board’s role in strategy and major transactions such as mergers, acquisitions, or sale of the company; (5) the board’s role in overseeing areas such as financial reporting, compliance and culture, sustainability and ESG. 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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