Revitalizing General Electric
(9 pages of text)
Case (Pub Mat)
General Electric Company (GE), the much-admired U.S. conglomerate, was in crisis. GE was once revered for the strength of its industrial businesses, its ability to earn additional profits through its GE Capital subsidiary, and the breadth and depth of its management talent pool. But in the 17 years since Jeffrey Immelt had run the firm, GE had seen shareholder value destruction on a large scale. In February 2018, John L. Flannery, GE's chief executive officer and chairman of the board, was taking big steps to revitalize the conglomerate, sending a signal that a new era of governance was emerging. Resetting the board, one of his initiatives, was also an admission that GE’s governance had failed the firm: it had been ineffective in ensuring that the company’s best interests were being taken into account. Was restructuring the board the right thing to do? Would it reassure current investors and attract new investors?
This case has been designed for use at both the undergraduate and the graduate level, and can be used in courses on corporate governance, strategic decisions, and business policy and regulation. After working through the case and assignment questions, students will be able to:
- understand how corporate governance strategy is developed;
- review how corporate governance executional errors can have an impact on corporate results; and
- analyze a company’s corporate governance structure and propose improvements.
United States, Large, 2018
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