Table Of ContentInternational Cases of
Corporate Governance
Jean Jinghan Chen
International Cases of Corporate Governance
“This book of corporate governance case studies provides a nice complement
to existing courses or modules covering the topics of corporate governance,
business ethics, and/or corporate social responsibility. There are several well
established corporate governance textbooks in existence that included some
cases, but this is one of the first stand-alone case books of which I am
aware other than Mallin’s casebook published back in 2006. Many of us
in the field of comparative corporate governance have our own conceptual
framework from which we describe and explain corporate governance behavior
and outcomes. This book provides the instructor with quite a bit of freedom to
frame the issues around their own personal perspective. Furthermore, in these
days of inflated book prices, students should benefit from a text that is fully
utilized. I especially liked the relative recency of these cases—all case studies
are less than ten years old. Given the turmoil within the global economy and
deglobalization trends during the past decade, this book is timely. I also liked
that fact that there was a wide range of geographic contexts captured in these
cases given the Western bias in previous texts and case studies. Finally, the
range of issues is impressive, ranging from dealing with accounting scandals,
to ownership and control rights conflicts, to business ethics and corporate
social responsibility challenges. If you are looking for a timely casebook on
comparative corporate governance, this text should serve you well.”
—William Q. Judge, Old Dominion University, USA; Dean of International
Corporate Governance Society Fellows.
“The release of Professor Chen’s new book of international corporate gover-
nance cases comes at a time when these new challenges are still defining the
new business landscape. Companies are now expected to be more transparent
and accountable to their stakeholders. This book not only provides us the
insight of how and why corporate scandals occur, but also provides insight
into the recurrence of corporate governance failures, offers practical guidance
for remedying options. Practitioners and policy-makers will certainly learn,
share and benefit from the critical thinking this book has provided.”
—Qin Zou, Vice President, Stanley Black and Decker, USA
Jean Jinghan Chen
International Cases
of Corporate
Governance
Jean Jinghan Chen
University of Macao
Macao, China
ISBN 978-981-19-3237-3 ISBN 978-981-19-3238-0 (eBook)
https://doi.org/10.1007/978-981-19-3238-0
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Preface
Corporate governance cases and their ramifications have been in the
public eye over the last 30 years. However, although significant atten-
tion has been given to corporate governance failure, corporate scandals
have continued to occur as a result of poor corporate governance. It
can be argued that there is no ‘one size fits all’ corporate governance
approach in reality. This aspect makes corporate governance an intriguing
area for study. Therefore, up-to-date case studies play a valuable role
in affording a deeper understanding of corporate governance issues in
different circumstances. Case-study analysis can also assist social scien-
tists in the development of theories and hypotheses, which can then be
subject to more rigorous scientific investigation.
This book intends to provide insights into current issues in corpo-
rate governance by examining twelve international cases where corporate
governance is seen to be an issue. The cases are designed to introduce
the reader to a factual ‘real life’ episode that has corporate governance
implications. They also reinforce the reader’s understanding of ‘good
corporate governance’ in each institutional setting, although there are not
always ‘right’ and ‘wrong’ answers. The case studies also seek to shed light
v
vi Preface
on why there are continuing incidences of corporate scandals, to what
extent these are a corporate governance failure, and in which ways corpo-
rate governance—and the behaviour of those involved in ensuring good
governance and an ethical culture in their business—may be improved
in the future.
The book can be thought of as a supplementary source of mate-
rial, which encourages discussion of various issues identified in the case
studies in seminars and classes. It is hoped the cases will stimulate interest
and motivate discussion on the reasons why corporate governance failed
or was seen to be inadequate.
Macao, China Jean Jinghan Chen
Acknowledgments
I would like to thank everyone who has encouraged and supported me
in writing this book.
First, my appreciation goes to Dennis Fai Lim Loi, Paying Song,
Xinxian Chen, Lingyu Huang, Shiqiang Chen and Ling Yang for
providing excellent research support in data collection and preparation
of the cases. I am also grateful for the financial support of the University
of Macau (CPG-2022-00022).
Thanks also go to Palgrave Macmillan Press, who contributed to the
publication of this book.
A heartfelt thanks to family and friends who have always been there
for me. A special thank you to my husband, Professor Zhili Sun, who has
accompanied me during the pandemic outbreak period and has always
been a source of power throughout my professional career and family
life. I have always felt your love, patience and devotion at all times.
vii
Contents
1 Introduction 1
References 8
2 Carillion PLC 11
John McDonough 13
Carillion’s Initial Problems 14
Carillion’s Corporate Governance Issues 15
The Cost of Carillion’s Collapse 22
Lessons Learnt from Carillion 23
Discussion Questions 25
References 25
3 Tesco Plc 27
A Brief History of Tesco 28
Retailer Competition 31
Discussion Questions 42
References 42
ix
x Contents
4 Volkswagen 45
Background 46
Volkswagen’s Corporate Government Issues 55
Lessons Learnt from Volkswagen’s Scandal 61
Discussion Questions 62
References 64
5 Wirecard 67
Wirecard’s Rise and Fall 68
Wirecard’s Corporate Governance Failure 72
Lessons Learnt from Wirecard’s Corporate Governance
Failure 78
Discussion Questions 81
References 81
6 Stora Enso 83
Stora Enso’s History and Early CSR Practices 84
Mistreatment of Local Landowners in China 86
Child Labour in Joint Venture in Pakistan 87
Improvement of CSR Practices After the Ethical Crisis 89
Lessons Learnt from Stora Enso’s Corporate Governance
Issues 91
Discussion Questions 94
References 95
7 Wells Fargo 97
The Scandal 99
Wells Fargo’s Corporate Governance Failure 104
Lessons Learnt from Wells Fargo’s Corporate
Governance Failure 112
Discussion Questions 113
References 114
8 CommInsure 117
The Scandal 120
CommInsure’s Corporate Governance Issue 122
Lessons Learnt from CommInsure 130
Contents xi
Discussion Questions 132
References 132
9 Toshiba (Japan) 135
The Scandal 137
Toshiba’s Corporate Governance Issues 140
Lessons Learnt from Toshiba’s Corporate Governance
Failure 152
Discussion Questions 154
References 155
10 Gome 157
GOME Proxy Contest 158
Damage Caused by the Proxy Contest 162
Lessons Learnt from GOME’s Proxy Contest 170
Discussion Questions 175
References 175
11 Alibaba 179
Alibaba’s Expansion Strategy and Business Model 180
Alibaba’s Ownership and Control 183
Discussion on the Impact of Alibaba’s Partnership
System 191
Discussion Questions 197
References 197
12 Lee Kum Kee 201
History of LKK 202
LKK’s Governance Challenges 206
LKK’s Performance Reward and Succession 212
LKK’s Family Governance vs. Business Governance 213
Discussion Questions 216
References 217
13 Yunnan Baiyao 219
History of the Company 220
Mixed Ownership Reform (2016–2019) 223
