Subject category:
Economics, Politics and Business Environment
Published by:
Ivey Publishing
Version: 1999-11-29
Length: 11 pages
Data source: Field research
Share a link:
https://casecent.re/p/15955
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Abstract
Royal Trustco presents a chronology of some of the key decision points in the history of the firm (the parent firm of Royal Trust) from 1980 to 1992. To clarify the concept of corporate governance, a number of interesting discussion questions are presented: How did Royal Trustco get to the point where the directors had to sell the company to save it? Why did this happen? Was it appropriate for Royal Trustco directors to keep paying dividends given the problems the company faced? Were there any signs that the company''s actions might lead to problems in the future? Could the problems have been prevented? Why might the board not have believed the CEO''s assessment of the situation? What are a director''s legal obligations in the operation of a firm? What can a director be held responsible for? If you had been a director of the company, would you have resigned at any point in time? Why or why not? The case is intended to serve as the starting point for a discussion of corporate governance in Canada.
About
Abstract
Royal Trustco presents a chronology of some of the key decision points in the history of the firm (the parent firm of Royal Trust) from 1980 to 1992. To clarify the concept of corporate governance, a number of interesting discussion questions are presented: How did Royal Trustco get to the point where the directors had to sell the company to save it? Why did this happen? Was it appropriate for Royal Trustco directors to keep paying dividends given the problems the company faced? Were there any signs that the company''s actions might lead to problems in the future? Could the problems have been prevented? Why might the board not have believed the CEO''s assessment of the situation? What are a director''s legal obligations in the operation of a firm? What can a director be held responsible for? If you had been a director of the company, would you have resigned at any point in time? Why or why not? The case is intended to serve as the starting point for a discussion of corporate governance in Canada.