1) Business Restructuring and Bankruptcy
The reorganization of high profile companies such as Lehman Brothers, General Motors, American Airlines and Kodak, attracts much attention in the press, partly because each case projects significant ripples through the economy. The unprecedented pace of disruptive technological change is forcing fundamental and often unavoidable reorganization of established players in the marketplace. Yet, the corporate bankruptcy process (particularly Chapter 11) is a black box to many observers and is often misunderstood. This session explains the underlying principles of bankruptcy and provides a primer on bankruptcy rules and procedures that are used to shield debtors from their creditors, sell assets, renegotiate contracts, secure new financing and emerge under a reorganization plan.
2) Corporate Finance
This session will evaluate and deconstruct the key issues of corporate finance that confront directors and review how managers should make investment decisions and what tools capable directors (and journalists) might use to study and evaluate those decisions. Topics include simple and complex discounting, cash flow analysis; free cash flows, and the incorporation of probability analysis in investment decisions. Discussion will include the role of the cost of capital, how to measure the cost of capital, and how directors (and others) might think more clearly about risky projects. We will review the modern relevance of the various Modigliani-Miller (MM) financing propositions.
This session will cover what journalists should know about requirements for financial literacy by corporate board members. The purpose of the income statement is not to report income; once you understand this, you’ll have mastered the basics. Topics will include controversies over revenue recognition; the single most important understanding about cash flow analysis; how some lie with accounting statistics; the convergence of US GAAP with International Financial Reporting Standards (IFRS); the important measure of income that journalists hide from their readers; and wreaking havoc with executory contracts.
4) Hot Topics in Corporate Governance: Silicon Valley Boardroom Conflicts, Non-Prosecution Agreements, and Cyber-Security
Our opening session presents an overview of three hot topics in corporate governance. Carl Icahn’s battle with eBay focuses attention on board structures and conflicts in Silicon Valley. We begin with a discussion of how and why governance in the Valley differs from governance at many other corporations, and the legal and public policy implications of those distinctions. We then move to a debate popularized by Judge Jed Rakoff over the use of non-prosecution agreements and the lack of criminal prosecutions of individuals at major financial institutions. We discuss the implications of these policy decisions and whether the government has struck an appropriate balance between individual and organizational responsibility. We close with a discussion of corporate governance and cyber-security and, as two case studies, address the theft of credit card data from Target and publicly disclosed information regarding the hack at the NY Times.