NAME: Anne Marielle Pla Uy

I. Below is a summary of the SEC corporate governance requirements of companies publicly listed in the
stock exchange.
Instructions:
1. Write T if the statement is valid and F if otherwise. If the statement is false, underline the word(s) that
make it wrong
and replace it with the correct one.
2. Explain the importance of each valid and corrected statement in promoting a strong corporate
governance.

1. Boards need to consist of at least 2 independent directors or ½ of the board which is higher.
Answer: F, 3 independent directors or 1/3
Explain: To ensure the exercise of independent judgement on corporate affairs and proper oversight
of managerial performance, including prevention of conflict of interests and balancing of competing
demands of the corporation.

2. The Board should conduct an annual self-assessment of its performance, including the performance of
the Chairman, individual members and committees
Answer: T
Explain: The board assessment helps the directors to thoroughly review their performance and
understand their roles and responsibilities.

3. The Board should establish a Corporate Governance Committee that compose of at least four
members, of whom should be independent directors, including the Chairman.
Answer: F, three
Explain: To ensure the compliance with and proper observance of corporate governance principles
and practices.

4. The company should recognize and place an importance on the interdependence between business
and society, and promote a mutually beneficial relationship that allows the company to grow its
business, while contributing to the advancement of the society where it operates.
Answer: T
Explain: The company plays an indispensable role alongside the government and civil society in
contributing solutions to complex global challenges like poverty, inequality, unemployment and climate
change.

5. The non-executive directors of the Board should concurrently serve as directors to a maximum of two
publicly listed companies.
Answer: F, five
Explain: Since sitting on the board of too many companies may interfere with the optimal performance
of board members, in that they may not be able to contribute enough time to keep alongside of the
corporation’s operations and to attend and actively participate during meetings, a maximum board seat
limit of 5 directorship is recommended.
6. The Board should ensure that basic shareholder rights are disclosed in the Manual on Corporate
Governance and on the company’s website.
Answer: T
Explain: It is the responsibility of the Board to adopt a policy informing the shareholders of all
their rights. Shareholders are encouraged to exercise their rights by providing clear-cut
processes and procedures for them to follow.

7. The positions of Chairman of the Board and Chief Executive Officer should be held by same person.
Answer: F, separate individuals
Explain: To avoid conflict or a split board and to foster an appropriate balance of power,
increased accountability and better capacity for independent decision-making, it is
recommended that the positions of Chairman and Chief Executive Officer (CEO) be held
by different individuals.

8. The Board should establish policies, programs and procedures that encourage employees to actively
participate in the realization of the company’s goals and its governance.
Answer: T
Explain: Active participation is further fostered when the
company recognizes the firm-specific skills of its employees and their potential
contribution in corporate governance.

9. The Board should identify the company’s various stakeholders and promote cooperation between
them and the company in creating wealth, growth and sustainability.
Answer: T
Explain: In formulating the company’s strategic and operational decisions affecting its wealth,
growth and sustainability, due consideration is given to those who have an interest in
the company and are directly affected by its operations.

10. The Board should establish an Investor Relation Officer (IRO) to ensure constant engagement with its
shareholders. The IRO should be present at every shareholders’ meeting.
Answer: T
Explain: To ensures that all information
regarding the activities of the company are properly and timely communicated to shareholders.

11. The Board should encourage active shareholder participation by making the result of the votes taken
during the most recent Annual or Special Shareholders’ Meeting publicly available the next working day.
Answer: T
Explain: When a substantial number of votes have been cast against a proposal made by the
company, it may make an analysis of the reasons for the same and consider having a dialogue with
its shareholders.
12. The Board should encourage active shareholder participation by sending the Notice of Annual and
Special Shareholders’ Meeting with sufficient and relevant information at least 30 days before the
meeting.
Answer: F, 28 days
Explain: Sending the Notice in a timely manner allows shareholders to plan their participation in the
meetings. It is good practice to have the Notice sent to all shareholders at least 28 days before the
meeting and posted on the company website.

13. The director should participate in discussions or deliberations involving his own remuneration.
Answer: F, No director
Explain: It is good practice for the Board to formulate and adopt a policy specifying the relationship
between remuneration and performance, which includes specific financial and nonfinancial metrics
to measure performance and set specific provisions for employees with significant influence on the
overall risk profile of the corporation.

14. The Board members should act on a fully informed basis, in good faith, with due diligence and care,
and in the best interest of the company and all shareholders.
Answer: T
Explain: The board member should act in the interest of the company and all its shareholders, and
not those of the controlling company of the group or any other stakeholder.

15. The Board should be composed of a majority of non-executive directors who possess the necessary
qualifications to effectively participate and help secure objective, independent judgment on corporate
affairs and to substantiate proper checks and balances.
Answer: T
Explain: To ensures that no director or small group of directors can dominate the decision-making
process.

16. The Company should provide in its Board Charter and Manual on Corporate Governance a policy on
the training of directors.
Answer: T
Explain: To ensures that new members are appropriately apprised of their duties and
responsibilities, before beginning their directorships.

17. The Board should be composed of directors with a collective working knowledge, experience or
expertise that is relevant to the company’s industry/sector.
Answer: T
Explain: A board with the necessary knowledge, experience and expertise can properly perform its
task of overseeing management and governance of the corporation, formulating the corporation’s
vision, mission, strategic objectives, policies and procedures that would guide its activities,
effectively monitoring management’s performance and supervising the proper implementation of
the same.
18. The Board should have a policy on board diversity.
Answer: T
Explain: Having a board diversity policy is a move to avoid groupthink and ensure that optimal
decision-making is achieved.

19. The Board should ensure that it is assisted in its duties by a Corporate Secretary, who should be a
member of the Board of Directors.
Answer: F, should not be a member
Explain: To safe keeps and preserves the integrity of the minutes of the meetings of the Board
and its committees, as well as other official records of the corporation

20. The Board should establish an effective performance management framework that will ensure that
the Management, including the Chief Executive Officer, and personnel’s performance is at par with the
standards set by the Board and Senior Management.
Answer: T
Explain: The results of performance evaluation should be linked to other human resource activities
such as training and development, remuneration, and succession planning. These should
likewise form part of the assessment of the continuing fitness and propriety of
management, including the Chief Executive Officer, and personnel in carrying out their
respective duties and responsibilities.

II. Select the letter of the best answer.

1. Audit committee activities and responsibilities include which of the following?
a. Selecting the external audit firm
b. Approving the corporate strategy
c. Reviewing the management performance and determining compensation
d. None of the above

2. The act that was formulated to protect investors by improving the accuracy and reliability of
corporate disclosures,
made precious to the securities laws and for other purposes
a. Organization for Economic Co-operation and Development
b. Sarbanes- Oxley Act, 2002
c. Global Governance Act
d. None of the above

3. The basic principle of “transparency and disclosure” for effective corporate governance responds
positively to the
following questions except.
a. Does the board of director safeguard integrity in financial reporting?
b. Does the board meet the information needs of investment communities?
c. Can an outsider meaningfully analyze the firm’s action and performance?
d. Has the board built long-term sustainable growth in shareholders’ value for the corporation?
4. The basic principle of “accountability” for effective governance answers the following questions
positively, except
a. Does the board recognize and manage risk?
b. Does the board lay solid foundations for management oversight?
c. Does the composition mix of board membership ensure an appropriation range and risk of expertise
diversity; knowledge added value?
d. Does the board promote objective, ethical and responsible decision making?

5. The characteristic of good governance where fair legal frameworks are enforced impartially is
a. Participation b. Rule of law c. Equity d. Accountability

6. Approving annual financial reports and other public documents are specific responsibilities of
a. Management b. Board of directors c. Shareholders d. Employees

7. Providing oversight of the internal and external audit function, the process of preparing the annual
financial statements and public reports on internal control are responsibility of
a. Board of directors b. Chief executive officers c. Chief financial officer d. Audit committee of the BOD

8. Who is responsible for ensuring the accuracy, timeliness of public reporting of financial and other
information for public companies?
a. External auditors b. Securities and exchange commission c. Shareholders d. Board of Accountancy

9. Who performs audit of companies for compliance with company policies and laws, audits efficiency of
operations and periodic evaluation of tests of controls?
a. External auditors b. Internal auditors c. Commission on audit d. Chief accountant

10. An independent director is expected to

a. Apply expertise and skills in the corporation’s best interest
b. Asset management to keep performance objectives at the top of its agenda
c. Respect the collective, cabinet nature of the board’s decision
d. Act as a conduit between the board and the organization
III. Essay
[Link], is a multinational energy group, recently listed on the Stock Exchange, Mr. Right, the current
Chief Executive has also been appointed as chairman of the Board. He is keen on imposing his views on
the group and has made it clear that he is prepared to work with those who remain loyal to his cause.
His shares in the company were also purchased with company funds.

Outline any corporate governance and related issues arising from Mr. Right’s appointment.
- In this case, the positions of CEO and Chairman of the Board are held by the same person,
Mr. Right. ABCXYZ multinational group of companies permit the CEO to become the
Chairman, which can cause conflict of interest problems. Like, the BOD is responsible for
evaluating the performance of executives such as the CEO. If the CEO also holds the position
of Chairman, he or she exercises the power to decide if his/her performance is satisfactory.
Therefore, corporate governance usually prescribes a separation of duties between the CEO
and the Chairman of the Board. The ways of mitigating or preventing these conflicts of
interests include the processes, customs, policies, laws, and institutions which have impact
on the way that ABCXYZ multinational group of companies controlled.

2.A Corporate Governance Code is an important requirement for listed companies. Some argue that
such a Code should be mandatory for all companies.

Discuss the benefits of having a Corporate Governance Code to shareholders and other interested users
of financial statements.
- A corporate governance code can boost your company's reputation. If you publicize your
corporate governance policies and detail how they work, more stakeholders will be willing
to work with you. This can include lenders who see you have strong fiscal policies and
internal controls, charities you might partner with to promote your business, government
agencies, employees, the media, vendors and suppliers. The practice of sharing internal
information with key stakeholders is known as transparency, which allows people to feel
more confident you have little or nothing to hide.

IV. Case Study

[Link] Scandal
Enron scandal, series of events that resulted in the bankruptcy of the U.S. energy, commodities, and
services company Enron Corporation and the dissolution of Arthur Andersen LLP, which had been one of
the largest auditing and accounting companies in the world. The collapse of Enron, which held more
than $60 billion in assets, involved one of the biggest bankruptcy filings in the history of the United
States, and it generated much debate as well as legislation designed to improve accounting standards
and practices, with long-lasting repercussions in the financial world.

Enron was founded in 1985 by Kenneth Lay in the merger of two natural-gas-transmission companies,
Houston Natural Gas Corporation and InterNorth, Inc.; the merged company, HNG InterNorth, was
renamed Enron in 1986. After the U.S. Congress adopted a series of laws to deregulate the sale of
natural gas in the early 1990s, the company lost its exclusive right to operate its pipelines. With the help
of Jeffrey Skilling, who was initially a consultant and later became the company’s chief operating officer,
Enron transformed itself into a trader of energy derivative contracts, acting as an intermediary between
natural-gas producers and their customers. The trades allowed the producers to mitigate the risk of
energy-price fluctuations by fixing the selling price of their products through a contract negotiated by
Enron for a fee. Under Skilling’s leadership, Enron soon dominated the market for natural-gas contracts,
and the company started to generate huge profits on its trades.

Skilling also gradually changed the culture of the company to emphasize aggressive trading. He hired top
candidates from MBA programs around the country and created an intensely competitive environment
within the company, in which the focus was increasingly on closing as many cash-generating trades as
possible in the shortest amount of time. One of his brightest recruits was Andrew Fastow, who quickly
rose through the ranks to become Enron’s chief financial officer. Fastow oversaw the financing
of the company through investments in increasingly complex instruments, while Skilling oversaw the
building of its vast trading operation.

The bull market of the 1990s helped to fuel Enron’s ambitions and contributed to its rapid growth. There
were deals to be made everywhere, and the company was ready to create a market for anything that
anyone was willing to trade. It thus traded derivative contracts for a wide variety of commodities—
including electricity, coal, paper, and steel—and even for the weather. An online trading division, Enron
Online, was launched during the dot-com boom, and the company invested in building a broadband
telecommunications network to facilitate high-speed trading.

As the boom years came to an end and as Enron faced increased competition in the energy-trading
business, the company’s profits shrank rapidly. Under pressure from shareholders, company executives
began to rely on dubious accounting practices, including a technique known as “mark-to-market
accounting,” to hide the troubles. Mark-to-market accounting allowed the company to write unrealized
future gains from some trading contracts into current income statements, thus giving the illusion of
higher current profits. Furthermore, the troubled operations of the company were transferred to so-
called special purpose entities (SPEs), which are essentially limited partnerships created with outside
parties. Although many companies distributed assets to SPEs, Enron abused the practice by using SPEs
as dump sites for its troubled assets. Transferring those assets to SPEs meant that they were kept off
Enron’s books, making its losses look less severe than they really were. Ironically, some of those
SPEs were run by Fastow himself. Throughout these years, Arthur Andersen served not only as Enron’s
auditor but also as a consultant for the company.

The severity of the situation began to become apparent in mid-2001 as a number of analysts began to
dig into the details of Enron’s publicly released financial statements. An internal investigation was
initiated following a memorandum from a company vice president, and soon the Securities and
Exchange Commission (SEC) was investigating the transactions between Enron and Fastow’s SPEs.

As the details of the accounting frauds emerged, the stock price of the company plummeted from a high
of $90 per share in mid- 2000 to less than $1 by the end of November 2001, taking with it the value of
Enron employees’ 401(k) pensions, which were mainly tied to the company stock. Lay and Skilling
resigned, and Fastow was fired two days after the SEC investigation started.
On December 2, 2001, Enron filed for Chapter 11 bankruptcy protection. Many Enron executives were
indicted on a variety of charges and were later sentenced to prison. Arthur Andersen came under
intense scrutiny and eventually lost a majority of its clients. The damage to its reputation was so severe
that it was forced to dissolve itself. In addition to federal lawsuits, hundreds of civil suits were filed by
shareholders against both Enron and Andersen.

The scandal resulted in a wave of new regulations and legislation designed to increase the accuracy of
financial reporting for publicly traded companies. The most important of those measures, the Sarbanes-
Oxley Act (2002), imposed harsh penalties for destroying, altering, or fabricating financial records. The
act also prohibited auditing firms from doing any concurrent consulting business for the same clients.

Discussion Questions
[Link] did the corporate culture of Enron contribute to its bankruptcy?
- It was facilitated by a corporate culture that encouraged greed and fraud.
[Link] should bear the blame of Enron’s downfall?
- Many stakeholders like auditors, bankers, lawyers etc. should also bear the blame.
[Link] the accountants/auditors be equally responsible for the Enron case? If yes, in what aspects?
- Auditors helped Enron senior management conceal their bad practices like concealing liabilities.
[Link] would “Corporate Governance” work for Enron?
- There are numerous ways to implement Corporate Governance in Enron. One example is requiring
Enron to set up an audit committee to review the work of external auditors and make sure the financial
statements are presented fairly and accurately.

2. MicroHoo!: The Attempted Takeover of Yahoo! By Microsoft

Case Overview
In February 2008, Microsoft launched an unsolicited bid for Yahoo at US$31 per share. With Yahoo’s
share price closing at US$19.18 the previous day, this represented a 62 per cent premium and seemed
like a deal not to be missed. However, Yahoo’s management resisted all of Microsoft’s efforts to take
over the company, resulting in Microsoft withdrawing its offer in May 2008. The objective of this case is
to allow a discussion of issues such as the role of the board and management in a takeover
situation, the use of anti-takeover defenses, and whether the takeover benefits shareholders of the
acquiring and/or target company.

The Drama Unfolds: Sequence of Events

On 1 February 2008, Microsoft launched an unsolicited takeover bid for Yahoo, hoping to tap on Yahoo’s
search engine and online advertising resources which would allow it to compete more effectively with
Google. Microsoft offered to pay US$44.6 billion, effectively setting the bid price at US$31 per share.
This represented a 62 per cent premium over Yahoo’s closing price the previous day. Yahoo’s share price
immediately Skyrocketed

In mid-February 2008, Yahoo formally rejected Microsoft’s offer, claiming that Microsoft had
substantially undervalued Yahoo’s shares. Reports had indicated that Yahoo’s minimum asking price was
US$40 a share. Yahoo co-founder and CEO Jerry Yang was seen by many as the main obstacle to the
merger. Under Yang’s leadership, Yahoo had enacted a controversial “poison pill” severance plan3 and it
commenced a search for a white knight investor. With the fall in Microsoft’s own share price as well as
to induce Yahoo shareholders to pressure the board to sell, Microsoft raised its offer to US$33 per share.
However, Yahoo’s board rejected the offer, insisting on no less than US$37 a share.
On 3 May 2008, Microsoft said it was withdrawing its bid. On the same day, Yahoo’s share price fell to
US$23 and its share price dropped further to below US$20 in the following few months. A number of
shareholder lawsuits against Yahoo’s board followed. On 3 June 2008, shareholder activist Carl Icahn
joined the fray. Icahn echoed the charges in several lawsuits’ that “Yang’s deep hostility toward
Microsoft” and his “defensive and self-interested conduct” had scuttled the deal. Icahn also told The
Wall Street Journal that should his proxy campaign prove successful, he would try to oust Yang, under
whom Yahoo’s stock had plummeted from US$33.63 a share in October 2007 to US$26.15 a share,
representing a drop of over 22 per cent.

Microsoft’s Interest in Yahoo

Microsoft CEO Steve Ballmer viewed the merger between Microsoft and Yahoo as an opportunity to
strengthen Microsoft’s market position in the burgeoning online advertising market, which was at that
time dominated by Google.

A merger of the two companies would raise the combined entity’s advertising revenues to US$4.74
billion. Although this still trailed Google’s US$6.12 billion, it would serve as a more solid foothold for
Microsoft in currently holds sway. As allies, “Microhoo!” would reach 86 per cent of US Internet users
and control 59 per cent of the online display advertisement market. Although Microsoft seemed to be
offering what looked like an exorbitant premium, especially considering Yahoo’s performance
over the years, Microsoft expected to realise synergies that would more than make up for it.
A letter from Microsoft’s Ballmer to Yahoo’s board of directors highlighted the benefits that were
expected from the merger, including: (1) scale economics, (2) expanded R&D capacity, (3)
operational efficiencies and (4) emerging user experiences.
The merger was also purported to bring about cost savings amounting to US$1 billion a year10.
Microsoft would also be able to leverage on Yahoo’s existing technologies and cut back on some capital-
intensive projects such as the building of massive data centers.
Though Microsoft initially pursued the deal believing that it would help it enter the lucrative online
advertising market, the resistance of the Yahoo board was proving difficult. Many Microsoft
shareholders were displeased at the company’s attempt to diversify its business. Whilst diversifying
would theoretically reduce risk to Microsoft and, by extension, to its stakeholders, diversification was
something its shareholders could potentially do more effectively on their own. The protracted battle
with Yahoo eventually took its toll on Microsoft, with its share price falling substantially over the 6
month period following the takeover offer, from US$30.45 per share to less than US$26 per share.

Yahoo’s Resistance
In spite of the benefits of the merger and overwhelmingly positive shareholder sentiment towards the
merger, Microsoft’s takeover attempt met with strong resistance from Yahoo executives. Even after
Microsoft sweetened the deal by raising its offer to $33 per share, Yahoo executives insisted on a
minimum asking price of $37 per share, which was viewed as being absurdly high. Given that the 52-
week high at that point in time was $33.63, an offer of $37 would represent a 93 per cent premium over
Yahoo’s closing price as at 31 Jan 2008 ($19.18). They went on to enact a controversial severance plan
and pursued alternative tie-ups with Google and AOL12 in an effort to put a stop to the takeover by
Microsoft. Yahoo executives cited regulatory hurdles, pricing and strategic issues, undervaluation of
Yahoo, and the loss of human capital and impact on employee morale in defense of their actions. CEO
Jerry Yang expressed concerns over potential regulatory hurdles that could delay or even squash the
merger with Microsoft, leaving Yahoo high and dry should they agree to the deal and move toward it,
only to subsequently have it fall through. The pricing of the deal was also of concern to Yahoo
executives. Microsoft’s original bid was half cash and half stock. As Microsoft’s share price dropped with
the announcement of the takeover bid, so too did the value of the deal. Yahoo was also wary of being
acquired by a much larger firm with little relevant expertise in its field. Despite its poor recent
performance, Yahoo continued to remain profitable. The same, however, could not be said for
Microsoft’s loss-making internet division and comparatively low share of search queries (9.9 per cent
compared to Yahoo’s share of 16.3 per cent in April 2009). Another disincentive for Yahoo to agree to
the merger is the perceived undervaluation by Microsoft, as vehemently argued by CEO Jerry Yang.
Sandeep Aggarwal, an analyst with financial-services firm Collins Stewart, estimated that if Microsoft
paid US$15 billion for Yahoo’s search operation and US$3 billion a year to run ads on Yahoo Web pages,
such a deal could add up to US$9 a share to Yahoo’s stock price – well north of Microsoft’s last offer of
US$33 a share.

Concerns about lowered employee morale and the loss of human capital were also cited, as a merger
with Microsoft would undoubtedly see a large reduction in Yahoo’s workforce as similar projects and
departments were combined. On a more personal note, CEO Jerry Yang’s emotional attachment to the
company he co-founded, his deep-seated hatred of Microsoft, and even perhaps his hope to establish
his legacy as an Internet visionary, also played a part in the decision to rebuff Microsoft’s takeover
attempt.

The Reaction of Yahoo Shareholders

In light of Yahoo’s recent poor performance, many shareholders saw Microsoft’s offer as a good way to
cash out on their investment, and thus were baffled by Yahoo executives’ continued resistance to
accepting the offer. In the wake of the failed merger attempt, many shareholders filed lawsuits against
Yahoo for breach of fiduciary duties18. In mid- 2008, Carl Icahn, who held about 5 per cent of Yahoo
stock, initiated a proxy fight to unseat all of the existing board of directors. However, even in light of
perceived executive incompetence, diminishing shareholder value and widespread shareholder dissent,
it is often difficult to replace the board of directors in a large public company like Yahoo. With one of
Yahoo’s largest and most influential shareholders backing the existing board, Mr Icahn finally dropped
his proxy bid in July 2008 in exchange for three seats on Yahoo’s expanded board, not having been able
to achieve his initial goals.

Looking Forward…

In November 2008, Yahoo announced it had begun a search to replace co-founder Jerry Yang as chief
executive. In January 2009, Carol Bartz was named CEO. Yahoo and Microsoft subsequently reopened
talks and inked a partnership in internet search and advertising in July 2009. Yahoo’s performance
continued to deteriorate, however, with revenues decreasing year on year, cumulating in the firing of
Carol Bartz, with CFO Tim Morse stepping in as interim chief in September 2011. Since October 2011,
there have been talks of certain groups of private equity firms looking to buy out Yahoo. In November
2011, it was reported that Microsoft had renewed its interest in Yahoo.

On 4 January 2012, Scott Thompson, the President of PayPal, was named as the chief executive of
Yahoo. This was soon followed by the departure of Jerry Yang from Yahoo’s board on 17 January.
Analysts said that Yang’s departure might speed up discussions to sell Yahoo’s prized assets, in
particular, its 40 per cent stake in Alibaba and its investment in Yahoo Japan. Whether or not any
deal pans out remains to be seen.

Discussion Questions
1. Did Yahoo’s management and board act in the best interest of shareholders when rejecting
Microsoft’s takeover offer?
The Board of Directors had adopted a shareholder rights plan (anti-takeover defenses). The
most common term for such plans were “Poison Pills”. Yahoo’s plan is to give the existing shareholder
the right to purchase additional share. It directly affects the firm’s management as they failed to
maximize shareholder value. Therefore, poison pills are the most effective defenses allowed by courts
without the approval of the shareholder. It reflected the owner opposition and negative effect to stock
price changes.

2. Discuss the actions taken by Yahoo’s management and board to block the takeover by Microsoft.
Should such actions be prohibited?
Repellents
- Procedures with the common aim of repelling takeovers.
- Procedural restrictions- to make takeovers more difficult.
- To provide protection for the target company but without acquiring control of it.
White Knights
- May approach another company to place a rival bid.
- The takeover strategy is capacity reduction, less threatened than by the hostile party.
- The friendly investor of a target firm- takeover attempt by another firm.
- It should not be prohibited.
- The “Poison Pill” is considered effective also.

3. In your opinion, do you believe that the offer by Microsoft is good for (a) the shareholders of Yahoo,
and (b) the shareholders of Microsoft?
a.) The shareholders of Yahoo!
Microsoft wag going to pay US44.6 billion offer (the bid price may be US$31 per share). Yahoo
shows that 62% contribute premium. This offer is in the profit category.
b.) The shareholders of Microsoft
 It increases the advertising revenue reached US$ 4.74. As an affiliate, MICROHOO will reach 86%
of Internet users in the US and control 59% of online display advert market

4. Place yourself in Carl Icahn’s shoes. What are some of the difficulties a minority shareholder faces
when dealing with a board like Yahoo’s?
All minority shareholders who are scattered, (80% shares) are defined as minority shareholders
and they cannot assemble enough votes to act as majority shareholders. The origin of the abuse of
minority shareholders comes mainly from the greed of some of the majority shareholders.