The NCAA Adopts “Dodd-Frank”: A Fable (PDF)
Stanford Graduate School of Business – Corporate Governance Research Program, Professor David F. Larcker and researcher Brian Tayan, MBA 2003
In recent years, NCAA football has been rocked by a string of high-profile violations, including those at USC, Ohio State, the University of Miami, and Auburn. In many ways, these violations were similar to the governance breakdowns at financial and other corporations leading up to the financial crisis of 2008 and 2009.
In the corporate world, Congress responded to the financial crisis by enacting the Dodd-Frank Wall Street Reform Act, which among other things imposed various governance requirements on all publicly traded companies.
What would happen were the NCAA to adopt these same provisions and require them of all universities and their football programs?
In this fictitious tale, we explore what such a set of rules would look like.
We ask:
* If these requirements would not work in an athletic setting, should we expect them to work in business?
* Why are the governance provisions of Dodd-Frank legally required, rather than voluntarily adopted by individual companies?
* Why does Dodd-Frank place such emphasis on executive compensation and disclosure? Will its compensation requirements reduce governance failures?
Read the Closer Look and let us know what you think!
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Tags: corporate governance, corporate governance research, Stanford Closer Look Series