Case
Supplementary Resources
Abstract
The primary subject matter of this case study is board composition and the governance roles of the board of directors in publicly traded companies. It is designed to supplement a text chapter or other material on the monitoring and advisory roles of directors and how board structure and composition impact these roles. The case is also designed to allow students to identify and assess governance issues related to firm ownership structures, family-owned or controlled companies, ethical conduct of the board of directors and conflicts between majority and minority shareholders. The case is sufficiently detailed to allow discussing the multidimensional aspects of board composition (or board diversity), including gender, ethnicity, expertise, experience and prestige. It is structured as a chronological description of the controversy generated by a proposed related party transaction (a buyout transaction) designed to dismantle a dual-share capital structure that allowed the Stronach family to control the company (Magna International Inc.) with just a fraction of its equity. The case can serve as the basis for both short case assignments and class discussions. It is appropriate for undergraduate and graduate courses in strategic management, leadership, corporate governance and financial accounting. The topic is relevant and current, as it can be related to the ongoing reforms of Canadian corporate governance practices for controlling shareholders and related party transactions.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
Resources
Appendix 1. Structure of Magna's Board of Directors from 2003 to 2012.
Source: Management Proxy Circulars from 2002 to 2012.
Appendix 2. Composition of Magna's Board of Directors from 2003 to 2012.
Source: Management Proxy Circulars from 2002 to 2012.
Appendix 3. Magna's Large Shareholders£ from 2003 to 2012.
Source: Management Proxy Circulars from 2002 to 2012.
Notes:
£Shareholders holding more than 5% of equity.
§Different types of stock (or shares): Sometimes publicly traded companies want their voting power to remain with a certain shareholder group. At such instances, they issue different classes of shares (such as, Type A and Type B) that are designed to capture different voting rights. The Type A shares is a classification of common stock that carry, in general, fewer voting rights than Type B shares. Companies will often try to disguise the disadvantages associated with owning shares with fewer voting rights by naming those shares ‘Class A’ or ‘Type A’, and those with more voting rights as ‘Class B’ or ‘Type B’.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
