Corporate Governance at Citigroup
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Case Code: CGOX005 Case Length: 11 Pages Period: 2003 Pub Date: 2005 Teaching Note: Not Available |
Price: Rs.300 Organization: Citigroup Industry: Financial Services Countries: United States Themes: - |
Abstract Case Intro 1 Excerpts
Excerpts
The Board of Directors
The Board's primary responsibility was to ensure effective governance that would protect the interests of its stakeholders. It was also responsible for the formation of committees for various functions and overseeing the management of the organization and compliance with various standards, laws, rules and regulations...
Board Committees
With assistance from the NCGC and after consultation with individual directors, the Board appointed the members of the standing committees. All the committees except the Executive Committee were presided over and operated by independent directors, on periodical rotation within committees. From time to time, the Board also established and maintained additional committees as necessary or appropriate. The Board and each committee had the power to hire and/or terminate the services of independent, legal, financial or other advisors, as was necessary, without consulting or obtaining the approval of any officer of the company in advance...
Code of Conduct
A code of ethics (see Exhibit: IV) applied to the executive officer of Citigroup and its reporting subsidiaries and all professionals worldwide serving in finance, accounting, treasury, tax or an investor relations role. The NCGC monitored the employees' compliance with the Code of Conduct, the Code of Ethics for Financial Professionals and other internal policies and guidelines...
Concluding Notes
Despite its efforts to introduce the highest standards of corporate governance practice, Citigroup had some concerns. On 28th April 2003, Citigroup's CGM (brokerage arm of GCIB) reached a settlement with SEC on charges of research analysts' conflict of interest, and agreed to pay a penalty of $150 million and additional $150 million towards disgorgement. In a settlement with SEC, Jack B. Grubman, a research analyst at CGM, agreed to pay $7.5 million as disgorgement and an additional $7.5 million in penalties on charges, of publishing false and misleading research reports, in favor of some telecom companies (including AT&T)...
Exhibits
Exhibit I: Citigroup: Board Structure (March 2003)
Exhibit II: Citigroup: Directors' Stock Ownership (March 2003)
Exhibit III: Citigroup: Committee Meetings (March 2003)
Exhibit IV: Citigroup: Code of Ethics for Financial Professionals
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