A Critical Review of Yahoo! Corporate Governance

Topics: Corporate governance, Board of directors, Corporate title Pages: 9 (2855 words) Published: April 17, 2015
Table of Contents
1.

Introduction…..………………………….…………………….………………….2

2.

Background……………………………………...……………………….....…….2

3.

Criteria for review………………………………..………....….………………....3

.
3.1. Board membership criteria………………………………………...…….....……..3 3.2. Selection of the Chief Executive Officer………………………………………....3 3.3. Independence of the board……………………………………………………..…4 4. Critical review of Yahoo! governance………………………………………...…..5 5. Recommendation……………………………………………,,…………..…….…8 6. Conclusion………………………………………………………………..……….8 References

1

Executive Summary
This paper conducts an analysis of a publicly listed US company. A set of criteria are offered for review and a an in dept analysis is conducted based on actions taken. A recommendation is then given followed by a conclusion to the analysis. I. Introduction

Corporate governance has come along way since the 19th century. What was once an elite fraternity based on little more than cronyism and family connections has now taken on a new shape, resulting from greed and deceitful corporate breakdowns of iconic companies in the first part of the 21st century. If the 19th century was the century of the entrepreneur; and the 20th century was the century of management; then the 21st century is the century of corporate governance.

This paper seeks to review the governance in a publicly listed company whose business performance has been criticised publicly and to report about its governance protocols and practices. A brief description of the company in question followed by the criteria for the review of governance will be presented. Then, a critical review of their existing practices will be forwarded. Finally a list or recommendations will conclude the review. The goal is to shed light on boardroom practices and to better understand past events so to prevent them from reoccurring.

2. Background
Yahoo! is a US based multinational Internet company headquartered in California’s silicon valley. It is widely known for its Web portal, search engine, Yahoo! Mail, advertising, online mapping, social media and a myriad of other services, including popular acquisitions such as Alibaba, flickr and Tumblr. Yahoo! was founded in 1994 and was once one of the most popular sites in the US. However, in recent years, its been plagued by poor governance. Between 2009- 2012, the board had dismissed 5 Chief Executive Officers, indicating a history of CEO problems with dire need of stability at the top. The current CEO, Marissa Mayer has been in place since 2012 and has also been heavily criticised; however, her leadership has changed the dynamic and culture of the company, resulting in a tripling of the stock price and acquisitions worth over $1 billion. (Goel 2014) The next section will explore the criteria for the review of governance.

3. Criteria for review
In light of on-going setbacks at Yahoo!, the following criteria have been identified, including a discussion on their importance and why it is appropriate to use them. Yahoo! has a section addressing my criteria in their Corporate Governance Guidelines and nothing appears out of place, in other words, the guidelines are concise and appropriate, according to the textbook. (Tricker 2012)

3.1 Board membership criteria
Although this may seem basic at first glance, it is not. Boards operate differently company to company. In theory, an active board oversees the formation of strategy in shareholder favour, they develop incentives for the CEO and other managers to tackle whilst also working toward the agreed upon strategic objectives. The board also critiques the performance of management against such objectives throughout the year and also formally once annually.

It is important for boards to run smoothly, as outlined above so to monitor the business, stay abreast with changes in the marketplace so to be in a position to act quickly when required. There is always work to be done by board and committee members, (independent or...

References: Brenner, K., 2014. Will Yahoo’s board save Marissa Mayer?
http://www.livemint.com/
http://www.livemint.com/Companies/ngTqJbaz8zOnnjTw12BhCL/WillYahoos-board-save-Marissa-Mayer.html [Accessed March 16, 2015].
Enderle, R., 2012. Yahoo CEO Scandal: Ethics Shoud Be More Important Than a
College Degree
Goel, V., 2014. After Huge Alibaba Payday, a Test for Yahoo Executives. The New
York Times
http://www.nytimes.com/2014/05/07/technology/after-alibaba-ipo-a-test-foryahoo-executives.html [Accessed March 16, 2015].
Helft, M., 2015. Yahoo Spins Off Alibaba Stake But Core Business Remains
Sluggish
Leblanc, R. & Gillies, J., 2003. The Coming Revolution in Corporate Governance.
site=ehost-live [Accessed March 18, 2015].
Swisher, K., 2014. A Yahoo Fanboy Turns Critic: “I Am Committed to Remaining a
Pest.” Re/code
Tricker, R., 2012. Corporate Governance: Priciples, Policies and Practices 2nd
edition., Oxford University Press.
Yarrow, J., 2013. How Marissa Mayer Kicked Dan Loeb Off Yahoo’s Board.
[Accessed March 18, 2015].
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