ROBBINS COMMUNICATION Harvard Case Solution & Analysis

ROBBINS COMMUNICATION  Case Solution

Question 1

An independent chairman provides balance of power between the board and chief executive officer (CEO), as well as supports independent board leadership, and strongly supports the interest of the shareholders. It is the right decision to select an independent chairman who can lead the board independently, while carrying the interest of management, shareholders, and board members altogether.

In the case of Jack, the board is accountable to the chairman and shareholders, because the CEO and board members can also be shareholders, therefore, in order to avoid conflicts in the board,selecting an independent chairman is a wise decision that can help balance the power between the board and CEO, and the shareholders as well.

Question 2

Jack made a good decision regarding expanding his business through inviting the investors, and creating new values for the old customers, as well as grasping the market with new offers, because the expansion of the company has led towards increased value for the shareholders, provided there is an efficient board of directors, and management.

Maintaining the balance of power between the Board of Directors and the CEO of the organization is very important, and this is the responsibility of Board’s Chairman, who communicates with the CEO and explains BOD’s interest, whereas, CEO represents the interest of the BOD and management.

When Jack would retire, it could be said that one investor would want the executive position, however the others would a just want to attend the board’s meetings only.The question arises as to why did Jack accept he condition of the investor to get position of the CEO, even though knowing that the Board could outvote Jack in the board meeting?

However, Robbins Communication(RC) board had separated the role of Chairman and CEO, as well as the board had independent directors who could not outvote a member who was the founder of the organization and had majority of shares in of the said organization, where the board is led by an independent chairman and directors.Therefore, instead of creating conflicts,their interest is to increase the value of the shareholders and expand the business.

Jack has made the right decision to take his business to new heights through inviting the investors to his business, and by creating a new board, independent chairman, and directors as well that could operate the organization while considering the interest of the shareholders.

Question 3

RC has annual turnover of $1.7million.The investors have taken very risky decision regarding investing in RC although its books have not been recorded properly since years, despite that they knew there are more opportunities in the marketing industry........................

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