The Need for a New Paradigm for Corporate Governance
This chapter reviews private equity (PE) to frame the Talecris case, which provides insights for researchers of governance, professional managers, directors and investors. Although Bayer had given up, Talecris' research and development (R&D) team persisted, proving Gamunex's therapeutic value for neurology patients. The product director told Talecris' board: Only Gamunex has Federal Drug Authority (FDA) approval for neurology. Ireland described an entrepreneurial culture: Risk taking is encouraged, failure is tolerated, learning is promoted, product, process and administrative innovations are championed, and continuous change is viewed as a conveyer of opportunities'. In practice, the Talecris private equity directors (PEDs) did not tolerate failure. The PEDs' values link to an entrepreneurial culture, which encourages the Top Management Team (TMT) to innovate and build competitive advantages. Uncomfortable as it undoubtedly is, the goad of insecurity leads to better performance rather than overconfidence, which inhibits the ability of equity investors to learn and reduces CEOs' ability to deliver value on investments.