Forge Group Ltd case study (B): director duties, management compensation and ownership, risk, and ethics

Maloney, Suzanne (2015) Forge Group Ltd case study (B): director duties, management compensation and ownership, risk, and ethics. IMA Educational Case Journal, 8 (1).

Abstract

The demise of Forge Group Ltd (FGL) is used to examine corporate governance, management compensation and ownership, risk, and ethics. Forge Group Ltd was a successful engineering company that collapsed within 12 months of a share price peak. The importance of good fundamental internal reporting is demonstrated by giving students the benefit of hindsight. The visceral feel of a corporate collapse with real investors losing money highlights the relevance and value of accounting and basic financial management.

This case and companion case A analyze FGL’s collapse. Case A focuses on the “numbers” by examining the financial statements, working capital management, and growth. Case B focuses on directors’ duties, management compensation and ownership, risk, and ethics. Independently or together, the cases can form the basis for a discussion about the governance of corporations, including reporting, transparency, risk, compensation, and ethics.

Basic-level students would be expected to explain and discuss key corporate governance concepts such as director duties, management compensation and ownership, risk, and ethics. Intermediate-level students would be expected to apply concepts such as director duties, management compensation and ownership, risk, and ethics to a real-world scenario. And advanced-level students would be expected to critique and draw conclusions on the application of director duties, management compensation and ownership, risk, and ethics to a real-world scenario.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 25 May 2016 04:55
Last Modified: 19 Sep 2017 23:47
Uncontrolled Keywords: financial statement analysis; take-overs; risk; corporate governance; ethics; management compensation
Fields of Research : 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150105 Management Accounting
URI: http://eprints.usq.edu.au/id/eprint/28425

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