College of Business Administration

Business Ethics and Social Issues Exercises:

The Proxy Game

Background: You are an employee of new and exciting employee-owned high technology company. As the details of the scenario to be presented in class will reveal, a vote has been scheduled that will play a critical role in shaping the future of the company. As the day of the vote gets closer and closer, you will be faced with a series of decisions regarding how to use your shareholder power to the best benefit of your assigned group.

Procedure: Class members will be divided into 9 groups of 3 people each. Each group represents one distinct employee/shareholder. Each group will be assigned a set number of shares which they will use to vote on the choices presented during the scenario. Not all groups have the same number of shares, that is, some have more shares and some have fewer shares. Each share is equal to one vote. Each group only knows the number of total shares assigned to them. The total number of outstanding shares is 10,000.

The game will consist of seven rounds. Each round will be introduced with a situation/situation update that will provide additional information regarding the claimed facts about the case from the perspectives of both parties involved. After each situation/situation update is presented each group will have the opportunity to re-make their decision regarding the assignment of their proxies/votes.

Proxies: A proxy is a power of attorney document given by shareholders of a corporation authorizing a specific vote on their behalf at a corporate meeting. During the scenario, each group will be asked to consider whether or not they would like to sign a proxy for the right to vote their shares to either of two competing parties to be presented during the scenario. Assigning your proxy to another party is for voting purposes only and does not affect the ownership of your shares (you still own them).

Proxy Rules:

1. You have the right to vote your shares yourself or to proxy them.
2. You have the right to revoke your proxy at any time.
3. You may vote/proxy any percentage of your total number of shares (ie. You can keep half to vote yourself and give half to the requesting party).

Goal: To maximize the benefit to your assigned group.

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