Objectives:
Identify corporate governance principles and practices
Analyze how board of directors are structured and play a role in corporate governance
Explain how corporate governance relates to firm performance.
Directions
Read and analyze the case, Tesla Golden Goose or Good Corporate Governance? Answer the questions. This assignment is not a case write up. The questions are focused on making you do the analysis while integrating the concepts from the material. Also incorporate what you learned from the program. DO NOT USE any other data sources other than the case. I need to assess your ability to identify and analyze the given data. Do your own analysis with the data given. I am looking at the logic and data support in the questions.
Tesla Governance Case Questions (also attached):
Only use the data provided in the case. Use of outside data will drop the grade 50%.
1. What is the role of effective corporate governance in improving a firm’s performance? Use the concepts proposed by the readings to explain what are some key governance mechanisms that are used to ensure that managerial and shareholder interests are aligned? (6 points)
2. Discuss and evaluate the evolution of Tesla’s Board of Directors. Is the board reducing the agency problem (explain)? Is the Board of Directors good or bad? Make sure you provide evidence/data from the case to support your answer. (12 points)
3. Create a scale and rate Tesla’s corporate governance. Discuss your findings and the items used to assess your rating. Use evidence from the case to support your assessment. (6 points)
4. Evaluate Tesla’s financial performance between 2018-2022 using the data provided in the case. What are your conclusions about Tesla’s performance as a firm? Do you see any financial red flags in the data? (make sure you look at Balance Sheet, Income Statement and ratios) (12 points)
5. Discuss Tesla’s stock performance in 2022. Has the corporate governance impacted on stock performance or is something else a factor? (8 points)
6. Do you agree with the separation of CEO and Chairman of the Board role for Musk or not? Explain why or why not. (8 points)
7. Write a short two paragraph memo advising Ari Klotas to buy more /hold current Tesla stock that Monarch Funds owns/ or sell it off? Give the arguments for your advice. REMEMBER THAT YOU ARE LOOKING ONLY FROM THE TIME FRAME OF THE CASE. (18 points)
If you are not comfortable creating ratios, there is a table of ratios below (see attachment “Tesla Governance Case Questions”).
-> To summarise: The questions should only be answered on the basis of the cases information (“Tesla Golden Goose Case”). Questions with a higher score are logically more important and should be answered in more detail.
