The Hershey Company has just received a purchase offer from Mondelez, another confectionery company, and students are thrust into the role of Layla Dylan, one of Hershey’s board members. The Hershey Company has an unusual ownership structure, in which the Hershey Trust Company controls 9% of the shares and 80% of the voting rights. The Hershey Trust Company is charged with providing for the Milton Hershey School, a responsibility which can be interpreted as ensuring for the richness of the entire community of Hershey, PA. While the purchase offer for the Hershey Company makes business sense, it may interfere with the charter of the Hershey Trust Company. As a board member of both the Hershey Company and the Hershey Trust Company, Dylan must balance the two organizations’ goals as she makes her decision.
The Hershey Trust: Managing Conflicts of Interest in Corporate Governance
by: Andrew Hoffman
Publication Date: March 31, 2017
Length: 16 pages
Product ID#: 1-430-505
Core Disciplines: Leadership/Organizational Behavior, Social Impact, Strategy & Management
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Description
Teaching Objectives
After reading and discussing the material, students should:
- Understand corporate governance in order to thoroughly assess a company’s drivers and incentives.
- Thoughtfully consider the roles, responsibilities, and influence of board members within corporate structure.
- Identify potential conflicts of interest that can arise from non-traditional corporate governance structures.
- Understand why a hybridized corporate governance structure could be more or less sustainable than a traditional governance structure.