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Dr. William J. Frey

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Hewlett-Packard Case

Hughes Case Corporate Governance

Corporate Governance

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Row 1, Col 1

CEO of Hewlett-Packard from 1999 until February 2005, this

individual also ran for senate inCalifornia in 2010

Who is Carly Fiorina?

1,2

Hughes Aircraft was responsible for manufacturing these for use

in military hardware.

What are analogue to digital computer chips?

1,3

“The system of allocating power in a corporation that determines how and

by whom the company is to be directed.”

What is corporate governance?

1,4

1. Provide increased protection to whistle-blowers 2. Require adherence to an established code of ethics

3. Provide "full, fair, timely and understandable disclosure"

4. Require maintenance of “ honest and ethical" behavior. 5. Mandate reporting ethics violations promptly

6. Insist on compliance with "applicable governmental laws,rules, and regulations"

What are some of the provisions of Sarbanes-Oxley?

2,1

This method of investigation involved investigators requesting information from operators orally, over the phone, pretending to be

someone else if necessary

What is pretexting?

2,2

This Hughes official, manager of micro-circuit manufacturing, threw his glasses

at Margaret Goodearl when told thatshe was considering initiating a harassment

complaint against him.

Who was Frank Saia?

2,3

Because this approach assumes that manager and owner interests diverge it sets as the central problem keeping managers faithful to owner directives.

What is the agency approach to corporate governance?

2,4

The strategy of this government approach to law breaking is to

provide incentives for corporationsto have in place serious and effective

compliance procedures.

What are the Federal Sentencing Guidelines?

3,1

This HP board member was found to have leaked informationabout board proceedings to thepress and asked to step down

from his position.

Who is Jay Keyworth?

3,2

These tests carried out by Hughestest operators were necessary to

ensure that the chips could operate effectively under

battle conditions.

What are the Temperature Cycle, Constant Acceleration, Mechanical Shock, and Hermeticity tests?

3,3

This approach assumes that managerscan be altruistic and therefore thatthe central problem in corporate

governance is to create an environmentin which managers find work

meaningful and fulfilling

What is the stewardship approach to corporate governance?

3,4

1. Identifying minimum levels of acceptable conduct and codifying

these into rules.2. Putting into place systems to

monitor behavior.3. Administering punishments to

those not in compliance.

What are the three parts to a compliance approach to ethical behavior?

4,1

This board member resigned in protestof the board deciding to fire Keyworth.Later he claimed that he also resignedbecause his privacy was invaded by

pretexting during the Kona IIinvestigations.

Who is Tom Perkins?

4,2

Margaret Goodearl and Ruth Ibarra brought documented evidence

of Hughes test skipping here.

What is the Inspector General Office of the US Department of Defense?

4,3

According to agency theory, an action breaks down intothese two dimensions.

What is the principal or originator of the action and the agent or executor of the action?

4,4

According to Dunn, the most fundamental duties of a director rely

entirely upon the absolute trust that each director must have

in one another’s confidentiality

What are the duties of deliberation and candor?

5,1

These two HP board members were initially allies but became bitter enemies as a result of the leak investigation. One represents

the agency approach to corporate governance while the other leans more toward the stewardship

approach

Who are Patricia Dunn and Tom Perkins?

5,2

What is the name of the lawsuit initiated by Goodearl and Ibarra to

bring to the attention of the governmentHughes’s wrongdoing?

What is a qui tam (on behalf of) lawsuit?

5,3

These require “exercising due diligence in hiring and assigning

personnel to positions with substantial authority

What are the Federal Sentencing Guidelines?

5,4

(1) identify and formulate values. (2) encourage employees to adopt values as

core commitments through training programs, ethics audits, and corporate codes.(3) respond to values "gaps“ or challenges by

means of moral support.

What are the components of a values-based approach to corporate conduct?