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    The document discusses a corporate governance case involving an independent director of a company. It outlines issues such as transparency, codes of conduct, and board independence. It also lists alternative courses of action the director could have taken regarding a potential irregularity in a tender process, such as refusing to meet with the informant and disclosing the information to the board. Finally, it analyzes whether certain corporate governance principles were followed or violated in the case, such as the director chairing multiple committees, failing to promote transparent decision making, and not exercising his duty of loyalty.

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    Document

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    Alexander Dimalipos
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    The document discusses a corporate governance case involving an independent director of a company. It outlines issues such as transparency, codes of conduct, and board independence. It also lists alternative courses of action the director could have taken regarding a potential irregularity in a tender process, such as refusing to meet with the informant and disclosing the information to the board. Finally, it analyzes whether certain corporate governance principles were followed or violated in the case, such as the director chairing multiple committees, failing to promote transparent decision making, and not exercising his duty of loyalty.

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    The document discusses a corporate governance case involving an independent director of a company. It outlines issues such as transparency, codes of conduct, and board independence. It also lists alternative courses of action the director could have taken regarding a potential irregularity in a tender process, such as refusing to meet with the informant and disclosing the information to the board. Finally, it analyzes whether certain corporate governance principles were followed or violated in the case, such as the director chairing multiple committees, failing to promote transparent decision making, and not exercising his duty of loyalty.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    33 views2 pages

    Document

    Uploaded by

    Alexander Dimalipos
    The document discusses a corporate governance case involving an independent director of a company. It outlines issues such as transparency, codes of conduct, and board independence. It also lists alternative courses of action the director could have taken regarding a potential irregularity in a tender process, such as refusing to meet with the informant and disclosing the information to the board. Finally, it analyzes whether certain corporate governance principles were followed or violated in the case, such as the director chairing multiple committees, failing to promote transparent decision making, and not exercising his duty of loyalty.

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    1. In bullet form, identify the corporate governance issues featured in the case.

     Promoting objective, ethical and responsible decision making.


     Transparency
     The importance of Code of Business Conduct and Ethics
     Board independence
     Accountability

    2. In bullet form, what are the alternative courses of actions which the independent
    director might have rather done? Identify the possible business, financial or
    governance consequence of each course of action? Make sure to provide
    supporting evidence from the Code of CG, Code of Ethics or any other policy or
    standard to bolster your answers.

     Mr. Neil Shah should have refused to meet Paul Joseph. He should have
    disclose to the board members the information he has obtained from Paul.

    • • • No, should not have agreed to meet Paul Joseph. As soon as


    the words “irregularity in the tender process” raised his antenna, he
    should have thanked Paul for the information and replied that HFC
    would look into the matter. Having met Paul, he has violated The
    Code of Conduct of HFC which is in compliance with the Corporate
    Governance Clause 49 sections (b) and (c). The high stakes involved
    also creates significant incentive for unethical behavior.
    • • • We recommend that Mr. Neil Shah immediately calls for a board
    meeting, disclose to the board members his actions and the
    information that he has obtained from Paul. He should also recommend
    the board members to set up an independent team to investigate the
    irregularities in the bidding process. The above recommendations
    would result in the board members deciding to remove him from his
    incumbent position in HFC until the investigation gets over.

    3. Which principles, if any, of corporate governance may have been followed or


    violated in the case?

    Followed principles:
     The Board have at least three independent directors.
     Independent directors of the Corporation possess necessary
    qualifications.
     Independent directors of the Corporation have served for 6 years which
    doesn’t violate with the maximum tenure of an independent director.
     The Board have established Investment Committee, which allows for
    specialization in issues and leads to a better management of the Board’s
    workload.

    Violated principles:

     The Audit and Ethics Committee of the HFC board is chaired by a one
    person (Neil Shah). This violated recommendation 3.2 of SEC Code of
    Corporate Governance stating that the Chairman of the Audit Committee
    should not be the chairman of the Board or any other committees.
     Neil Shah has violated The Code of Conduct of HFC which is in
    compliance with the Corporate Governance Clause 49 sections (b)
    and (c).
     The Board has inefficiently implement and monitor its compliance with the
    Code of Business Conduct and Ethics and internal policies.
     Independent director (Neil Shah) does not promote and exercise
    transparent, objective, and independent decision making.
     Independent director does not exercise duty of loyalty.
     Independent director does not act on a fully informed basis.

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