Discussion post and student reply

Enterprise Risk Management ITS 835

Dr. Ronald Menold [email protected]

Chapter 30 Alleged Corruption at Chessfield Mini Case Study

ITS 835

Introduction

▪ Open-ended case study

▪ Basis for discussion

▪ Useful in examination broader implications

Alleged Corruption at Chessfield

▪ Chessfield – Fictional private American company in sports and entertainment – HQ in NYC – “Good ol’ boys” board

▪ Informal governance

▪ Whistle-blower – CEO compensation very high (4x comparable peers) – Potential environment for excessive risk taking

▪ Chessfield CEO requested independent governance review

Alleged Corruption at Chessfield

▪ Review included – Document review minimal documentation – Interviews substantial discontent and lack of confidence in leadership

▪ CEO compensation – Limited documentation to support decision – Basis seemed to be long relationship with decision makers – Industry standard metrics missing

▪ Risk management – Few risk management protocols or controls – Most processes were manual (i.e. no IT)

Alleged Corruption at Chessfield

▪ Review resulted in 45 recommendations – 43 from reviewer – 2 added by regulator

▪ All but 2 recommendations were accepted, which were – 3 longest serving board member resign – A female be selected for directorship and compensation committee

▪ Identify broad implications of this case

Chapter 30 Alleged Corruption at Chessfield Mini Case Study

ITS 835