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Ch. 13. Wynn Resorts. Corporate Governance Principles (M-Z)

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Did the board of directors operate according to the principles of good corporate governance?   

Discuss a principle the Board of Director (BOD) honored or failed to observe.

Required Textbook Readings

  • Chapter. 13 (MO 3.3)
  • Case: Corporate Governance and Executive Misconduct at Wynn Resorts, p.303-304. (MO 3.3)

Required Online Readings

CLASS ROOM Instruction

First read the attach chapter attached, then read each student respond to the professor questions. You will need to respond to the professor with your own point. Once finish responding to the professor then you can begin to respond to each student. You say ____ I agree with your statement or disagree with your statement.

YOUR FIRST RESPOND:

Kevin Zinter 

RE: Ch. 13. Wynn Resorts. Corporate Governance Principles (M-Z)

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The thought that Wynn’s BOD operated according to good corporate governance is laughable. The most obvious principle violated by Wynn’s BOD is that of diversity of board membership. Investors would balk if Melinda Gates was on the Microsoft board with her husband. Imagine if the Microsoft board included Bill Gates, Melinda Gates, Bill’s father’s accountant and the mayor of Seattle who partied with Bill in college.

Despite casinos attempts to reinvent Vegas and the gambling image as more family friendly and less mafia based, it appears Wynn kept the cronyism it claimed to eschew. A good board of directors does a thorough background of potential, new BOD members. Robert Miller brings about plenty of well-publicized red flags from his time in office. I know of several Fortune 1000 companies that began looking into new board members but eliminated them from candidacy due to political connections – some of which.

A strong BOD isn’t a room filled with ‘yes men’ and ‘yes women’. The board of directors often ask tough questions of c-suite employees. Their purpose is to keep the top level executives accountable for their actions and to ensure the day to day operations are aligned with the long term goals of the company.

By all accounts, Steve Wynn surrounded himself with people who would support his ideals as they each accumulated personal wealth. 

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YOUR RESPOND TO EACH STUDENT

Mahan Shirjahani 

RE: Ch. 13. Wynn Resorts. Corporate Governance Principles (M-Z)

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Did the board of directors operate according to the principles of good corporate governance?   Discuss a principle the BOD honored or failed to observe.

No, the board of directors did not act according to the principles of good governance. The board of directors of Wynn Resorts neglected to observe various principles of good corporate governance. The remuneration levels of executives and the CEO should be chosen by the compensation committee in consonance with the assessment of the shareholders. The board of directors permitted the CEO of the organization to take wanted compensation without looking for an endorsement from the shareholders.

They should make choices that are profitable for the organization’s future. The board of directors made no move against the CEO in spite of the claims of inappropriate behavior against him. They restricted the appointment of Elaine Wynn, who was a reasonable possibility for the post, on the bearings of Steve Wynn. 
The principles of good governance are the arrangements and techniques that help an organization to accomplish its objectives and avoid conflicts. These principles give a guide to the individuals who are responsible for an association like the top board of directors and CEO. They are under an obligation to adjust the interests of different partners like investors, clients, and representatives. Compelling administration advances straightforwardness and trust in the association which causes it to draw in more clients.

A portion of the standards for good administration are: 
a) Composition of the board of directors – The board individuals ought to have essential aptitudes, information, and freedom to release their obligations adequately. 
b) Division of duties – There ought to be an away from of forces and obligations between the board and CEO of the organization. Nobody ought to have unhindered capacity to decide. 
c) Appointment of the directors – The board of directors ought to be delegated after a thorough and straightforward choice methodology. 
d) Commitment – All directors should give adequate time towards the exhibition of their obligation. 
e) Information and support – The board members should be provided with all the fundamental data that is basic for the release of their obligations in an ideal way. 
f) Evaluation – The board should assess its exhibition and that of the committees and individual directors. 
g) Re-election – All directors should be submitted for re-election based on their performance at regular and standard stretches. 
h) Financial announcing, review, and audit – Transparency is a fundamental part of good corporate governance. The board members should present a reasonable and justifiable evaluation of the organization’s performance. 


Steve Wynn, the owner of Wynn Resorts, was affirmed of being engaged with a progression of allegations going from sexual harassment of employees to one-man control over the company. He was accused of sexual misconduct by numerous individuals of his representatives who used to work at the resort. He was expressed as the most overpaid CEO of an organization. His compensation remained at $28.2 million, while other directors and shareholders were given standard salary and profits. The vast majority of the board of directors had close binds with Wynn and followed his requests. The board of directors comprised essentially of individuals who were close to Steve and it is accepted that his ex, Elaine Wynn, who was likewise a board part was kept from re-appointment on his headings.

https://diligent.com/en-gb/blog/principles-good-corporate-governance/ 
https://blog.softexpert.com/en/principles-of-good-corporate-governance/
https://corpgov.law.harvard.edu/2016/09/08/principles-of-corporate-governance/

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YOUR RESPOND TO EACH STUDENT

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Cameron Miller 

RE: Ch. 13. Wynn Resorts. Corporate Governance Principles (M-Z)

According to the list of key features the principles of good governance holds:

Select outside directors to fill most positions – Wynn Resorts technically did do this as outside of Wynn, the other nine were “nominally independent”.

Hold open elections for members of the board – Wynn Resorts held elections for most of the members, but three stood for election or re-election for 3-year terms

Hold elections for all directors annually – As stated previously, only 3 stood for election or re-election each year whereas they all should have been put up for election.

Appoint independent lead director – Wynn was the lead director of his own BOD. This is preposterous. He holds all the power with no one to balance it out.

Diversify board membership – Wynn resorts BOD was comprised of Wynn, his family and their family friends and acquaintances.

Everyone involved had their own personal connections to the Wynns and therefore held a certain bias to their actions. 

YOUR RESPOND TO EACH STUDENT

Claudio Quintero Smith 

RE: Ch. 13. Wynn Resorts. Corporate Governance Principles (M-Z)

The board of directors (BOD) didn’t operate according to the principles of good corporate governance. The BOD failed in the diversify board membership principle since nine directors had close personal ties with Steve Wynn, the CEO of Wynn Resorts. For example, Boone Wayson, one of the BOD members, was the son of a close friend of Steve Wynn, and Edward Virtue, another BOD member, had known Steve Wynn for more than 40 years. I believe that Wynn Resorts received an F in its corporate governance practices from Glass Lewis (a proxy advisory firm) since there was no diversification in the Wynn Resorts’ BOD. The company missed the benefits of diversified board membership, such as expands options and enriches discussions that would improve the leadership in the company. The BOD supported the ideas and decisions of Steve Wynn every time due to their relationships with him. Finally, Steve Wynn only received votes against him in 2002. This event supports that the BOD was complacent with Steve Wynn’s ideas, opinions, and wishes.

References

Lawrence, A., & Weber, J. (2020). Business and Society: Stakeholders, Ethics, Public Policy. New York: McGraw-Hill Education.

YOUR RESPOND TO EACH STUDENT

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