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In early 2020, Singapore Airlines Limited (Singapore Airlines) faced severe liquidity issues as the global pandemic halted its flights and uncertainty loomed. Erstwhile massive cash reserves were quickly running out, and the airline's executives pondered how to save the company from insolvency. Singapore Airlines' majority shareholder, Temasek Holdings Limited, agreed to subscribe to a massive capital-raising exercise of up to S$15 billion via a proposed rights offer and mandatory convertible bonds (MCBs). Although minority shareholders were not convinced that the rights issue would be a good investment in such uncertain times, they had to decide whether to vote for it and whether to subscribe to the rights issue and MCBs.

Karl Naim, Co-Founder and CEO of Purpl, embarked on a venture to lower remittance costs for his native Lebanon. Since October 2019, the Lebanese economy had entered a free fall as its banking sector collapsed and large swathes of its population were plunged into poverty. As a repeat technology entrepreneur, Naim alongside his two co-founders decided to launch a new remittance aggregator to improve access to low-cost remittances, which acted as a lifeline for most local families. By becoming a fiat-to-fiat aggregator and eventually leveraging stablecoin technology, he expected that in the first phase he could cut remittance fees in half from 9-12% to 5-6% -- and eventually up to 1%. With the Lebanese population's trust in financial and banking institutions shattered, could Purpl succeed in its mission? How could it convince its potential users, the broader Lebanese public and the 20 million-strong Lebanese diaspora around the world, to adopt a different way of sending and transacting with digital cash? For primary remittance users, who only needed to reliably receive a monthly $100-$200 for basic goods and other necessities, could Purpl convince them both to change their habits and to trust the financial system that had put them in this situation in the first place? Moreover, given Purpl's ultimate goal to upend the current establishment, would its "playing nice" with current established institutions haunt the firm's "anti-establishment" credibility from ever materializing?

In 2017, Sahrudaya Healthcare Pvt. Ltd. (SHPL), a successful chain of corporate hospitals based out of Hyderabad, India, approached private equity (PE) firm Samara Capital for a capital infusion. After conducting a thorough due diligence and evaluation of the company, Samara Capital brought its major limited partner (LP) Medicover, a European multinational healthcare and diagnostics company, into the decision-making process. In a surprise turn of events for SPHL, Medicover offered to become a strategic partner and invest in SPHL. With the new proposal on the table, top executives from Samara Capital, Medicover, and SHPL attended a high-level meeting in New Delhi to discuss the modalities of the term sheet.

Spreadsheet supplement for case ISB311.

In 2016, Pythagoras Global Fund (Pythagoras), based in the United Kingdom, decided to launch a fund focused on emerging markets, especially those in Brazil, Russia, India, and China (BRIC countries). Pythagoras’s fund manager favoured investing in family-owned businesses, but the investment opportunities in India used ownership structures different than those used in developed markets. The structures in Indian groups altered the cash flow and effective ownership rights in the subsidiary firms, which had ramifications for stakeholders and raised associated governance issues. The fund manager needed to decide which firm to choose by assessing the investment opportunities and evaluating the corporate governance of the companies.

In 2016, Pythagoras Global Fund (Pythagoras), based in the United Kingdom, decided to launch a fund focused on emerging markets, especially those in Brazil, Russia, India, and China (BRIC countries). Pythagoras's fund manager favoured investing in family-owned businesses, but the investment opportunities in India used ownership structures different than those used in developed markets. The structures in Indian groups altered the cash flow and effective ownership rights in the subsidiary firms, which had ramifications for stakeholders and raised associated governance issues. The fund manager needed to decide which firm to choose by assessing the investment opportunities and evaluating the corporate governance of the companies.

Spreadsheet Supplement for Case W25643

CEO pay has gone through remarkable changes over the past two decades. The most striking new features have been the increased use of stock options in the early 2000s, and of restricted stock since then. Both forms of stock-based compensation are intended to resolve the agency problem that occurs when CEOs do not act in the best interests of stockholders, but each has its advantages and limitations. In this instalment of Organizational Performance, we discuss the history of their use and similarities and differences between the two, and argue that both are often overused. Bonuses based on strategic goals, on the other hand, may be underused. We conclude with a contextual approach to guide boards of directors in making choices among the forms of CEO compensation--stock options, restricted stock, salary, and bonus--to incentivize CEOs to work toward maximizing organizational performance. Briefly, stock options are most appropriate for growth firms, and restricted stock for stable firms. Both forms of stock-based compensation are more appropriate for new than for long-tenured CEOs.

A new entrepreneur planning to start a new exports and/or imports business is confronted with the issue of managing and mitigating various risks in international trade. Risks are inherent to any business, be it domestic or international. However, when business becomes international, the dimensions, complexities, and quantum of risks get amplified. This technical note discusses the nuances of various risks faced by the exporters, such as; credit risk, country risk, and currency risk faced by the exporters, popularly known as the three C’s of international trading risks, and the strategies of mitigating those risks. The note also discusses the various risks encountered by the importers, such as; currency risk, supplier risk, and product risk and the methods of managing such risks.

Cyberattacks on corporations are an increasingly common phenomenon that imposes significant costs on shareholders, customers, and management. It is instrumental for corporations to both invest in appropriate precautionary security measures and have a comprehensive cybersecurity incident response plan (IRP), led by a skilled incident response team, that defines what procedures to follow. This fictional case is framed from the perspective of Ida Inglewood, the chief information security officer (CISO) of Abank, a midsized financial institution that has experienced a massive and unprecedented cyberattack in which $450 million of customer funds were stolen. The case begins with a 2:00 a.m. phone call in which the CISO informs Abank's CEO of the incident. Abank's IRP is activated, and the CISO provides a detailed report to the bank's management team, explaining the legal, regulatory, and financial implications of the cyberattack. The case culminates in the following critical decision: whether to restore full access to the deposits of Abank's customers at the beginning of the business day, or to keep operations closed until a full investigation of the cyberattack has been completed. This case is taught at Darden in a course on "Artificial Intelligence and the Future of Work"; it would also be well suited for in-person or online MBA courses in banking and financial markets, new technologies, or communication and crisis response.

This case follows a fictional hedge fund manager as she works to finalize an investment thesis on Comerica Incorporated to present to her manager, who is undecided as to whether the fund should buy (go long) or sell (short) the stock. Assessing Comerica's value and outlook is complex. She needs to have a view on Comerica's future earnings, which are clearly linked to the gravity and duration of the COVID-19 pandemic and the resiliency of the banking sector as a whole. This case is taught at Darden in a course on "Artificial Intelligence and the Future of Work"; it would also be well suited for in-person or online MBA courses in banking and financial markets, new technologies, or communication and crisis response.

On March 10, 2021, Ralph Mupita the new CEO of MTN Group, Africa largest telecommunications company, presented the group's 2020 annual results and unveiled a new strategy to "drive growth and unlock value." Despite MTN's leadership in most of its markets, the company's share price was trading at 15-year lows putting Mupita under pressure to accelerate a turnaround. The case considers his plans to execute against the new strategy by spinning off MTN's fintech business and creating more shared value in its markets while at the same time building valuable technology platforms and delivering industry-leading connectivity. Could MTN's leadership team achieve all four priorities within five years as promised, or were they trying to do too much too quickly? Did they have the right structure and team in place to do so? Although Mupita was convinced that swift action and dramatic change were needed to succeed, there were skeptics both inside and outside the firm.

The case is based on WeLab Bank (WLB), a virtual bank in Hong Kong, and can be assumed to be set at the time of its writing in mid-2021. WLB has launched its operations in Hong Kong and introduced its initial retail banking products, with additional products to be launched soon or in the pipeline. As one of eight virtual banks in Hong Kong, a market with a very mature banking sector and extensive financial service offerings, WLB is focused on democratizing financial services in Hong Kong. For many people in Hong Kong, managing their personal finances can be a daunting task. In addition to managing their daily expenses, it can be a challenge to sort through various savings and investment products and identify the ones that can best help them reach their long-term financial goals. Hong Kong also has the most expensive property market in the world, so making a wise property investment, either as a primary residence or as a rental property also requires considerable due diligence. Yet many Hong Kong people feel they do not have access to sufficient financial advice to be able to make informed decisions, whether investing in property, selecting savings or investment products or managing their daily finances. For high net-worth individuals in Hong Kong, however, the situation is different as large deposit holdings at a local bank, for example, provides one with access to professional financial advice. Recognizing this discrepancy in financial services locally, the Hong Kong Monetary Authority (HKMA), the defacto central bank in Hong Kong, was hopeful that the virtual banks could leverage their technology resources to provide Hong Kong people of all income brackets with improved access to financial tools to more effectively manage their personal finances. For Ms. Janice Chung, WeLab Bank's Manager for Growth Operations and Strategy, the key challenge was identifying the products and services delivered via digital channels that would best meet the needs of Hong Kong

Total shareholder return (TSR) has become the definitive metric for gauging performance. Unlike accounting measures such as revenue growth or earnings per share that reflect the past, TSR is based on share price and thus captures investor expectations of what will happen in the future, which is its chief attraction. The problem is that TSR conflates performance associated with strategy and operations with that arising from cash distributions (dividends and buybacks). In this article, the authors discuss the distortions embedded in TSR and propose a new metric, core operating shareholder returns, that emphasizes operational performance. It also provides a comprehensive assessment of the buyback revolution--and the verdict is quite damning.

The case follows Ashraf Abu Issa, CEO and chairman of Abu Issa Holding (AIH), as he contemplated the fate of his company's regional expansion. AIH was a Qatari diversified holding company, whose primary business was luxury retailing and distribution. Abu Issa had set his company on a path of aggressive regional expansion since 2012, rapidly opening new stores in neighboring countries, most notably Saudi Arabia and the UAE. In July 2017, he woke up to the news that Saudi Arabia along with the UAE, Bahrain, and Egypt had imposed a blockade on Qatar, cutting diplomatic relations with the country as well as closing all movements of people, goods and money between their countries and Qatar. A year into the blockade the situation was rapidly deteriorating, Abu Issa was at a crossroads: Should he wait for the blockade to end? Or was now the right time to exit and focus on the Qatari market at home? If he chose to exit, could he find a new investor to buy the business at a discount? Or should he close his shops and move as much as their inventory and staff as possible to Qatar? If he chose to exit, what would be the best way to do so?

In 2019, an investment analyst for a hedge fund firm based in the Bahamas was tasked with evaluating his firm's exposure to the automotive industry. The hedge fund firm held various large positions in the automotive segment, most notably in two equities-Fiat Chrysler Automobiles N.V. and Ford Motor Company. The analyst decided to focus on these global industry giants as a proxy for the broader automotive segment. His manager expected an assessment of the industry's prospects, so the analyst had to decide if the past stock performance of the two companies was a fair indicator of each company's and the industry's future. He also had to consider why one company would lose almost twice as much value as the other in one specific period. And why did the stock of the more diversified company experience the steeper decline? The analyst was eager to answer these and other questions, both for his own and his manager's interest.

Much like the famous philosophical thought experiment, impact investing raises questions about perception, observation, and reality. What is our sense that an investment results in social, environmental, and financial return? What changes can we observe taking place? What is the state of the situation as it exists (perhaps by measurement)? This case study applies this framework to our analysis of the social, environmental, and financial impact of forestry and timberland investment.

In April 2020, Rudra Industries and Services Private Ltd., a diesel generator product and service provider in Uttar Pradesh, the largest state in northern India, was facing a dilemma. Diesel generators (DGs) were heavily used by telecommunication companies to provide uninterrupted power supply to their towers, despite frequent power outages. However, consolidation in India’s telecommunication industry had led to stagnation in the company’s core business. To maintain a continuous flow of income, the company was considering a business expansion to leasing diesel generators to clients. The company was asked to prepare a bid proposal for leasing 100 DG sets to a local bank with numerous branches across the state. What factors would influence the pricing estimates in the bid? How should the company finance the purchase of generators that will be leased out to the client? How could the pricing estimate be calculated to ensure the project would be profitable? Should the company even consider entering the leasing sector, considering recent reductions in power outages and increasing diesel prices?

Instructor spreadsheet to accompany product W25654.