Corporate Governance Case Study at Knight Transportation Inc.
|
Code : GOV0024B
|
Region : USA |
||||
 |
 |
 |
OR |
||
Excerpts |
|||||
|
Background note KTI, headquartered in Phoenix, Arizona, was started by Kevin Knight, his brother Keith Knight, and his cousins Randy and Gary, with a total of 80 years of experience in the trucking industry. The business activities included transporting commodities like consumer goods, packaged foodstuff, paper products, beverage containers, refrigerated goods, etc., for shippers throughout the US, and selling trucks and trailers. In just two years after inception the company posted annual revenues of US$ 13 million. By 1993, KTI was having 200 trucks in business... The Board of Directors As per the NYSE listing standards, the Board was expected to have a majority of independent directors. The main criterion of independence was the complete absence of any form of material relationship with KTI (non-employee) and this was decided annually by the Board. A member of the Board of Directors (BoDs) could not serve in more than 4 corporate boards, besides KTI’s. Likewise, the Chief Executive Officer (CEO) couldn’t serve in more than 2 other corporate boards, in addition to KTI’s BoD... Board’s responsibilities and functions The BoD was responsible for the overall management of KTI. The key decisions were always made by the BoD, taking into consideration the best interests of the company and the shareholders The BoD fixed employee compensation plan, the amount of cash dividends for the share-holders and the frequency of payment of cash dividends, after taking into consideration the financial condition, cash requirements13, tax requirements, and corporate law requirements pertaining to KTI’s business activities... |
|
| For Case Books
Click Here >> For Case eBooks Click Here >> |
|
Financial disclosures The original report of Form 8-K, was filed by KTI on April 7, 2005. All the subsequent decisions were reported as amendments to the original report. As per the rules of the SEC, the financial statements followed the Generally Accepted Accounting Principles (GAAP20) in the US. The consolidated financial statements21 were submitted in Form 10-K by December 31 of every year, whereas the quarterly reports were submitted in Form 10-Q...
