Tyco International Corporate Governance Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Tyco International Corporate Governance Case Solution

Problems Analysis

The company was committing its biggest mistake by not taking action against the CEO who was involved in illegal activities. To survive in the long run,the company needed to have a positive and clean image in the market, leaders needed to have such an influential image, but the company and its leaders were not trustworthy, which was the factor that was harming the company’s reputation.The. company was not paying the taxes, and it seemed possible for auditors to notice these issues and carrying out an extensive investigation, which would drag the company into more trouble. The stock prices of the company were overvalued due to these events (Joyner and Raiborn, 2005). Any unusual financial reports had the tendency to land the company into huge trouble.

The company faced these issues because of the conflict of interest, each level employee had his personal benefit to be the part of this illegal activity.Another issue was that the company’s directors were aware of the situations, but they were not willing to correct these issues,and were rather involved in these activities for their own direct and indirect financial benefits. The company was overwriting its financial reports and was showing fewer profits to reduce the tax payments. And the newly bought assets were not mentioned in the financial reports.

Recommendations

The recommendations for Tyco international are given below:

To solve the problems in the company; the chairman and the team should make placards to make a flow of meeting agenda, which should be given to the members prior to the meeting so that the stakeholders can track the company’s activities and the stakeholders should be prepared enough to analyze the company’s proposal and along with that, they must prepare to evaluate and communicate the company’s statistics.
The company should make all the bylaws clear to its management and employees. Bylaws should be written in detail, so that they would know the consequences of what they have been doing. It will help the company in communicating the consequences to the employees and the employees would always think twice before getting involved in illegal activities. Bylaw should include the following sections:
Power capacity of every member and the process of meeting.
Members’ voting rights.
Penalties against rule-breaking.
Other legal amendments.
The board of directors should make a strict and strong mechanism to look after the business activities, especially the CEO should be asked for accountability and must be kept an eye on.His leadership style and behavior should be evaluated, which will help the company to get the track records of what the CEO is doing and how he is guiding his employees.
The board members should ask for the information regarding what the company is doing and what is going on in the company.On-time information gathering will help the auditors to know more about the company and its activities.

Conclusion

Tyco was going very well before Kozlowski joined the company as an accountant, but after he became the CEO, he got involved in illegal activities.He was not paying taxes and was involving the board members and lower management employees to conduct such illegal and fraudulent activities. The company should make strict rules for auditors and the auditing firms to track these types of activities, with an inclusion of struct actions to be taken against any individual in the company who gets involved in such illegal and fraudulent activities..........................

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Tyco International Corporate Governance Harvard Case Solution & Analysis