Normally, serving on a company's board of directors is not a full-time job, but in the summer of 2002, Nick Donatiello (GSB 1986) found himself in exactly that position. As a member of Gemstar-TV Guide International's (Gemstar's or the Company's) board of directors and its Audit Committee, Donatiello was caught up in a storm of accounting issues, shareholder lawsuits and a power struggle between the Company's largest shareholders. Donatiello, one of only three independent directors on the board, wanted to do what was right for shareholders. However, the decisions required to arrive at that outcome were far from clear. This case centers on accounting and governance issues that arose during the 2001 audit of Gemstar TV Guide International. In summary, although management and the company's auditors, KPMG, agreed with the recognition of certain revenues, the company's audit committee believed that those revenues should be restated. The case discusses the specifics of two accounting issues, in particular, and also provides an overview of the company and the various parties involved.

"Safety net" providers play an essential role in delivering health care to underserved populations in states such as California. As the prominence of the safety net increases, medtech innovators seeking to make a difference have begun to design and develop new technologies to help these providers improve the quality and cost effectiveness of their care. This note introduces practical considerations that should be taken into account when developing technologies targeted at the safety net. Specifically, by looking downstream in the biodesign innovation process to anticipate issues related to safety net economics, reimbursement, technology assessment, and purchasing behavior, innovators can begin to understand how to adapt their approach and create new technologies that are not just meaningful, but feasible for adoption in the complex safety net system.

As director of the California HealthCare Foundation's (CHCF) Innovations for the Underserved program, Margaret Laws' goal was "to reduce barriers to efficient, affordable healthcare services for the underserved." The path to achieving this goal took multiple forms, including improving the availability of specialty care for low-income, uninsured, non-English speaking and rural Californians. Specialty care was an incredibly constrained resource within the healthcare system, even for insured patients. In order to improve access, increasing specialist throughput became paramount; and this could often be achieved through process improvements. But in conversations with faculty from Stanford University's Program in Biodesign (henceforth referred to as Biodesign), Laws became intrigued by the potential of new device technologies to improve throughput and increase capacity. The question was whether the biodesign innovation process taught at Stanford to develop devices for commercially attractive markets could be adapted to focus on the needs of the underserved, and particularly needs related to limited access to specialists. In order to answer that, the faculty from the Biodesign program and CHCF launched a pilot program that would undertake a condensed version of the identification phase of the biodesign innovation process, which included needs finding and needs filtering. This paper explores that project and what was learned.

Dennis Kozlowski took over the helm of Tyco International, Ltd. (Tyco) in 1992. By the end of its 2001 fiscal year, Kozlowski's Tyco had made over 100 announced acquisitions with total revenues in excess of $30 billion (Exhibit 1). Kozlowski's strategy, called "growth on growth," fueled Tyco's aggressive approach toward acquisitions and took the company from just over $3 billion of sales in 1992 to $36 billion in 2001. Investors supported Tyco's strategy as evidenced by the tenfold increase in Tyco's stock price over the same period (Exhibit 2). Analysts also lauded Tyco, issuing reports with titles like, "The Proof Is in the Great Numbers! Buy." But was the proof really there? This case describes Tyco Corporation's mergers and acquisitions activity from its founding through the Kozlowski era. In particular, it focuses on accounting practices used in concert with M&A activity that served to manipulate Tyco's earnings. It goes into detail regarding the CIT acquisition.

This case takes an in-depth look at the events and causes leading to the U.S. government bailout of American International Group. Source material includes testimony before Congress, AIG's public disclosures and various news articles. The case tells the history of AIG, its Financial Products division and credit default swaps. The case then highlights several external and internal factors cited by management, experts and the press as having a role in AIG's failure. These factors include AIG's governance, compensation and risk management policies, as well as the roles played by the rating agencies, accounting standards (specifically mark-to-market accounting) and regulation.

The case discusses the current US and international accounting guidance regarding the disclosure of contingent and environmental liabilities, including FAS 5 and IAS 37. It then addresses the role of socially responsible investors and other factors that gave rise to the FASB revisiting its guidance. The case details the proposed new guidance and includes perspectives from various constituent groups (financial statement preparers and users) on its pros and cons. The case concludes with an example of existing guidance in practice using Novartis AG. It includes Novartis' financial and other quantitative disclosures regarding environmental liabilities, and its liability from a dumpsite in Bonfol, Switzerland, in particular.