Scribd Logo
Upload

Welcome to Scribd!

  • 544 views

    Barnes and Noble Assignment

    Uploaded by

    meghkkna
    Q1) What is Ron Burkle’s problem regarding the way Leonardo Riggio is managing Barnes & Noble? Why is it important for Riggio to respond to Burkle’s concerns? Q2) What corporate governance issues are involved in the Yucaipa proxy fight?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Barnes and Noble Assignment

    Uploaded by

    meghkkna
    544 views3 pages
    Q1) What is Ron Burkle’s problem regarding the way Leonardo Riggio is managing Barnes & Noble? Why is it important for Riggio to respond to Burkle’s concerns? Q2) What corporate governance issues are involved in the Yucaipa proxy fight?

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Q1) What is Ron Burkle’s problem regarding the way Leonardo Riggio is managing Barnes & Noble? Why is it important for Riggio to respond to Burkle’s concerns? Q2) What corporate governance issues are involved in the Yucaipa proxy fight?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    544 views3 pages

    Barnes and Noble Assignment

    Uploaded by

    meghkkna
    Q1) What is Ron Burkle’s problem regarding the way Leonardo Riggio is managing Barnes & Noble? Why is it important for Riggio to respond to Burkle’s concerns? Q2) What corporate governance issues are involved in the Yucaipa proxy fight?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    ETHICS ASSIGNMENT

    Submitted by: - Group 9


    Meghna 13A1HP112
    Saubhagya Jyoti 13A1HP098
    Tanvi Lal 13A1HP020
    Sunaina Tandon 13A2HP053
    Rahul Sankruth 13A3HP055
    Neha Singh 13A1HP100
    Navin Kumar 13A2HP014
    Akshat Sinha 13A3HP030



    Q1) What is Ron Burkles problem regarding the way Leonardo Riggio is managing Barnes &
    Noble? Why is it important for Riggio to respond to Burkles concerns?

    Answer: Ron Burkle, founder of Yucaipa and also a shareholder of Barnes and Noble, was
    unsatisfied with the strategic decisions of Riggio. He had following problems regarding the way
    Riggio managed the company:-
    1) He was scoffed at the $514 million deal made by Barnes and Nobles to acquire Barnes
    and Nobles College bookstores, which were privately owned by Riggio and his wife. He
    viewed this as a conflict of interest on Riggios part; given Riggio's ownership stakes in
    both companies .He also felt that snapping up a chain watching over hundreds of college
    bookstores would be a step back as campuses were starting to flock to digital textbooks.
    The shift to digital was validated by Barnes & Noble itself when it introduced the Nook
    e-reader a year later.
    2) Burkle even felt that the board of Barnes and Noble was completely under the influence
    of Riggio. Since Riggio has vested interests, he was compromising on the long-term
    sustainability of the company to achieve his short-term goals. He even proposed a way
    out of this, when he asked for the appointment of independent directors on the board of
    Barnes and Noble. He believed that independent directors would serve as a counterweight
    to Riggios influence on the Barnes & Noble board.
    Burkel, founder of Yucaipa companies, was also a major stakeholder in the company as he held
    around16.8% shares in BN. Like in case of every company, the Board of Directors is accountable
    for its decisions to the shareholders. As Riggio was the Chairman of the Board, it was important
    for him to respond to Burkles concerns.

    Q2) What corporate governance issues are involved in the Yucaipa proxy fight?
    Answer: Following corporate governance issues are evident in the Yucaipas proxy fight:-
    1. Role of Board of Directors of the company: The primary responsibility of directors of
    the Company is to oversee the affairs of the Company for the benefit of stockholders. But
    when BN acquired Barnes and Nobles college bookstores from Riggio, there was an
    outrage from the stockholders of the company as they felt that Riggio was benefitting
    himself at the expense of the company. It put a question mark on the very integrity of the
    members of board.


    2. Absence of Independent Directors on the Board: The Board of Barnes and Noble
    lacked independent and non-executive directors. Because of this, the board was
    discriminate and also lacked diversified membership. Due to this, Riggio was able to take
    the decisions as suited to him, rather than the company.

    3. Function of Nomination Committee: In any company, there is a nomination committee,
    which is responsible for nominating and appointing the members to the board. But in the
    case of Barnes and Noble, the members and the CEO was appointed by Riggio, who was
    himself the Chairman of the Board and also the founder of BN.

    You might also like