A Board in Crisis (B): The Aftermath of the December 4, 2002 Board Meeting

Published 24 Mar 2016
Reference 6079
Topic Strategy
Region Europe
Summary

The case describes the boardroom discussion at the time of the IT bubble in the early 2000s, when all major telecoms (British Telecom, Deutsche Telecom and France Telecom) had problems. BT is the first to react and decides on a major asset sale - including its mobile division - to restore the balance sheet (in view of much depreciated assets after the bubble burst). The case presents the very different tack taken by the management and board of France Telecom, inviting discussion as to why two companies facing similar conditions reach radically different decisions. This then involves discussion of the influence of stakeholders in governance and how they contribute to outcomes.

Teaching objectives

The case invites discussion of the question of how two companies in similar conditions end up taking radically different decisions. This provides a good illustration of the stakeholder view of governance, as it is only through the viewpoints and influences of stakeholders that the two outcomes can be explained.

Keywords
  • Corporate Governance
  • Crisis
  • Board-Executive Dynamics
  • M&A
  • Comparative Governance (UK vs France)
  • Stakeholders
  • Q31516
  • Corporate Governance
  • Value Creation, Strategy and Implementation