Implementing Enterprise Risk Management: Case Studies and Best Practices

CHAPTER 30 Alleged Corruption at Chessfield: Corporate Governance and the Risk Oversight Role of the Board of Directors

RICHARD LEBLANC

Associate Professor of Law, Governance, and Ethics at York University

The police and the regulator contacted the author early in the author's governance review process. When the author attended his first meeting with the chairman of the board of directors for Chessfield Inc. and the regulator, the regulator mentioned the word corruption explicitly. Now the New York Police Department was also investigating the conduct of some of Chessfield's directors, by interviewing them and collecting evidence. The author's role was to conduct a thorough governance review, with a specific focus on risk management, and report his findings and recommendations to the regulator and board of directors. Chessfield is a fictional company; however, this case is based in part on actual situations that have been modified and disguised.

CHESSFIELD INC. AND ITS BOARD OF DIRECTORS

Chessfield is a well-known American company in the sports and entertainment industry. It is headquartered in New York, and is led and governed by an outspoken and successful CEO and a blue-chip board of directors. Several directors are household names and have been on the board for many years, knowing each other in social and professional circles. One director had been on the board for 28 years, the second-longest-serving director had been on the board for 24 years, and so on. The shortest-serving ...