CORPORATE
GOVERNANCE
Prof Marie-Elisabeth Bellefroid
,Content
Corporate governance session 1: ............................................................................... 4
What’s in a name? ..................................................................................................... 4
1. Introduction to corporate governance .............................................................. 4
2. Basic principles .............................................................................................. 9
3. Corporate governance tripod ......................................................................... 11
4. Positioning & role Board of Directors .............................................................. 12
5. The CEO & the Board ..................................................................................... 13
6. The executive management & the Board......................................................... 15
7. Who decides what? Management or Board? ................................................... 16
Corporate Governance Session 2: ............................................................................ 17
Who’s who in the Boardroom? .................................................................................. 17
1. Theranos case .............................................................................................. 17
2. Size of the Board of directors ......................................................................... 19
3. Who’s who in the Board? ............................................................................... 20
4. The optimal mix ............................................................................................ 22
5. Independence within the Board ..................................................................... 23
6. Board selection and appointment .................................................................. 26
7. Diversity and inclusion .................................................................................. 28
Corporate Governance Session 3: ............................................................................ 31
Supporting the board in it’s role ................................................................................ 31
1. Board Committee Functioning ....................................................................... 31
2. Testimonial Nico Houthaeve: The role of internal and external audit ................ 38
3. Transparency and reporting on corporate governance ..................................... 42
Corporate Governance Session 4: ............................................................................ 44
Digital transformation .............................................................................................. 44
1. Introduction to digitalization .......................................................................... 44
2. Digital & analytics in finance (& audit) ............................................................ 50
3. Chair of the Future – AI in the Boardroom ....................................................... 54
4. Audit digitalization ........................................................................................ 56
5. Blockchain ................................................................................................... 57
6. The auditor’s digital toolkit ............................................................................ 58
2
,Corporate Governance Session 5: ............................................................................ 63
Board functioning & dynamics ................................................................................. 63
1. Key elements of board functioning ................................................................. 63
2. The board meeting ........................................................................................ 63
3. The board agenda ......................................................................................... 64
4. Information flow ........................................................................................... 65
4. Decision-making .......................................................................................... 67
5. Board culture & dynamics ............................................................................. 68
6. Director remuneration ................................................................................... 70
7. The chair of the board of directors ................................................................. 71
8. The chair of the board of directors ................................................................. 72
Corporate Governance Session 6: ............................................................................ 74
Capita Selecta ........................................................................................................ 74
1. The chair of the future ................................................................................... 74
2. Chair of the future research: global results ..................................................... 74
3. Chair of the future research: Belgian results ................................................... 75
4. Board evaluation........................................................................................... 77
5. The power of corporate purpose .................................................................... 78
3
, Corporate governance session 1:
What’s in a name?
1. Introduction to corporate governance
1.1. Corporate Governance in action
Corporate Governance is very much alive today.
• Enron was a major fraud case where management hid large debts, and the Board failed
to notice. When the truth came out, Enron collapsed, and its auditor Arthur Andersen
(one of the Big 5) also failed. This led to new laws and corporate governance codes to
strengthen oversight, transparency, and Board responsibility.
• More recently, at Danone, the CEO focused on ESG (environmental, social and
governance) goals, but the company’s financial performance declined. This shows
that even with good intentions, focusing too much on non-financial goals without
keeping financial control can still create governance problems.
• OpenAI, originally a non-profit organization, decided to create a commercial branch to
fund its research. This caused debate because people questioned whether a non-
profit focused on public benefit should also engage in profit-making activities. It raised
concerns about balancing ethical goals with financial interests.
• Elizabeth Holmes was the CEO of Theranos, a company that claimed to have
revolutionary blood-testing technology. In reality, the technology did not work as
promised. She misled investors and the public, and was later convicted of fraud and
sentenced to prison.
• Starbucks faced criticism when its CEO left and the company chose an external
replacement. This went against its strong internal culture that promotes growth from
within. The decision sparked debate about whether hiring from outside fits the
company’s values and long-term identity.
• Van Hool, a Belgian family-owned company, went bankrupt after heavy investments
created cash shortages. The firm needed restructuring and new funding, but internal
family conflicts over succession delayed key decisions. The lack of unity in
management weakened the company, and eventually an external party took it over.
4
GOVERNANCE
Prof Marie-Elisabeth Bellefroid
,Content
Corporate governance session 1: ............................................................................... 4
What’s in a name? ..................................................................................................... 4
1. Introduction to corporate governance .............................................................. 4
2. Basic principles .............................................................................................. 9
3. Corporate governance tripod ......................................................................... 11
4. Positioning & role Board of Directors .............................................................. 12
5. The CEO & the Board ..................................................................................... 13
6. The executive management & the Board......................................................... 15
7. Who decides what? Management or Board? ................................................... 16
Corporate Governance Session 2: ............................................................................ 17
Who’s who in the Boardroom? .................................................................................. 17
1. Theranos case .............................................................................................. 17
2. Size of the Board of directors ......................................................................... 19
3. Who’s who in the Board? ............................................................................... 20
4. The optimal mix ............................................................................................ 22
5. Independence within the Board ..................................................................... 23
6. Board selection and appointment .................................................................. 26
7. Diversity and inclusion .................................................................................. 28
Corporate Governance Session 3: ............................................................................ 31
Supporting the board in it’s role ................................................................................ 31
1. Board Committee Functioning ....................................................................... 31
2. Testimonial Nico Houthaeve: The role of internal and external audit ................ 38
3. Transparency and reporting on corporate governance ..................................... 42
Corporate Governance Session 4: ............................................................................ 44
Digital transformation .............................................................................................. 44
1. Introduction to digitalization .......................................................................... 44
2. Digital & analytics in finance (& audit) ............................................................ 50
3. Chair of the Future – AI in the Boardroom ....................................................... 54
4. Audit digitalization ........................................................................................ 56
5. Blockchain ................................................................................................... 57
6. The auditor’s digital toolkit ............................................................................ 58
2
,Corporate Governance Session 5: ............................................................................ 63
Board functioning & dynamics ................................................................................. 63
1. Key elements of board functioning ................................................................. 63
2. The board meeting ........................................................................................ 63
3. The board agenda ......................................................................................... 64
4. Information flow ........................................................................................... 65
4. Decision-making .......................................................................................... 67
5. Board culture & dynamics ............................................................................. 68
6. Director remuneration ................................................................................... 70
7. The chair of the board of directors ................................................................. 71
8. The chair of the board of directors ................................................................. 72
Corporate Governance Session 6: ............................................................................ 74
Capita Selecta ........................................................................................................ 74
1. The chair of the future ................................................................................... 74
2. Chair of the future research: global results ..................................................... 74
3. Chair of the future research: Belgian results ................................................... 75
4. Board evaluation........................................................................................... 77
5. The power of corporate purpose .................................................................... 78
3
, Corporate governance session 1:
What’s in a name?
1. Introduction to corporate governance
1.1. Corporate Governance in action
Corporate Governance is very much alive today.
• Enron was a major fraud case where management hid large debts, and the Board failed
to notice. When the truth came out, Enron collapsed, and its auditor Arthur Andersen
(one of the Big 5) also failed. This led to new laws and corporate governance codes to
strengthen oversight, transparency, and Board responsibility.
• More recently, at Danone, the CEO focused on ESG (environmental, social and
governance) goals, but the company’s financial performance declined. This shows
that even with good intentions, focusing too much on non-financial goals without
keeping financial control can still create governance problems.
• OpenAI, originally a non-profit organization, decided to create a commercial branch to
fund its research. This caused debate because people questioned whether a non-
profit focused on public benefit should also engage in profit-making activities. It raised
concerns about balancing ethical goals with financial interests.
• Elizabeth Holmes was the CEO of Theranos, a company that claimed to have
revolutionary blood-testing technology. In reality, the technology did not work as
promised. She misled investors and the public, and was later convicted of fraud and
sentenced to prison.
• Starbucks faced criticism when its CEO left and the company chose an external
replacement. This went against its strong internal culture that promotes growth from
within. The decision sparked debate about whether hiring from outside fits the
company’s values and long-term identity.
• Van Hool, a Belgian family-owned company, went bankrupt after heavy investments
created cash shortages. The firm needed restructuring and new funding, but internal
family conflicts over succession delayed key decisions. The lack of unity in
management weakened the company, and eventually an external party took it over.
4
