Case Study- Vector Aeromotive Corporation - 1685 Words

No 3. The Extended Case Study- Vector Aeromotive Corporation Zhenhua Rui 09/20/2010 Vector Aeromotive Corporation was a company which designed, manufactured and sold exotic sports cars. Vector was the only U.S.-based manufacture of exotic sports cars, and his major competitors were Ferrari and Lamborghini. Gerry Wiegert is the President and founder of this company. In 1987, the board of directors was formed with three directors. This case shows events happening between the board and President Gerry. In March 1993, the company’s financial position was critical, and Vector’s board decided to ask President Gerry to resign from the company due to his bad performance. But Gerry declined to resign and declare a war against board of directors.†¦show more content†¦All these actions or issues together caused a serious conflict between the board and president. Finally, the board tried to remove the President Gerry, and Gerry rejected to resign. The bad situation of Vector Company was not totally caused by Gerry’s fault. There were some problem s with the board. Seeing from three board member’s background, Board members were not independent from managers. For example, John Pope was CFO of Vectors from 1998 to 1990. Barry Rosengrant was consultants to vectors and business associates of Gerry for many years. Gerry was also the board chairman. Three members were all related to the company or President Gerry. This relationship may influence the board’s action in the future. Research evidence shows that higher independence is associated with lower incidence of accounting fraud. In response to president’s issues, the board also took some action against President Gerry. Some of actions are not appropriate or timely. 1) TheShow MoreRelatedEssay about Vector Aeromotive Corporation Case Study1206 Words   |  5 Pagesthe following duties: 1) duty of care – duty to make/delegate decisions in an informed way; 2) duty of loyalty – duty to advance corporate over personal interests; 3) duty of good faith – duty to be faithful and devoted to the interests of the corporation and its shareholders; 4) duty not to â€Å"waste† – duty to avoid deliberate destruction of shareholder value. There is no reason to believe that the duties of Vector’s board should be any different. The major conflict between Vector’s board and its