ASSIGNMENT 1
 
Submitted To:
Dr Hanita Kadir Shahar
  
Prepared By:
 Vanitha D/O Chengkeni (831368)
 Introduction
• Nikola Corporation is an American Company whose headquarters is in Phoenix,Arizona,US.
• It was founded by Trevor Milton in 2014, Salt Lake City ,Utah,US.
• As of June 2020,Mark Russel is the CEO and the president.
• It designs and plans to manufacture hydrogen-electric trucks and became a public traded list company
in early 2020.
• It is expecting to reach full production of about 30,000 fuel cell-electric vehicles in 2027 and 15,000
battery-electric vehicles the following year.
• On September 10, 2020, Hindenburg Research published a massive report that accused Nikola of fraud
entitled "
Nikola, How to Parlay an Ocean of Lies Into a Partnership With the Largest Auto OEM in America ."
 What are the key corporate governance
issues raised in the case?
• NIKOLA : Fast Track to Dead End 
• The founder of a zero-emission truck venture is found guilty and resigns after fraud allegations
• The fraud was carried out ( from at least March to September 2020) in two ways:
1. Nikola primarily mislead investors through scores by its CEO, among other things (technological
advancements, in-house production capabilities, reservation banks and financial outlook
2. Mislead investors by misrepresenting or omitting material facts about the prototype
vehicles ,demonstrating hydrogen station and the economic risks
In addition, Nikola failed to maintain disclosure controls and procedures as required by the Exchange Act
Rules for issuers with a class of securities registered under the Exchange Act.
 What are the major underlying causes of these
Causes of all problems by :
issues?
Poor ethical leadership is the major cause of start-up failure
• Investors understand that strong leadership skills are required for a high ROI, but most are unwilling to invest in leadership
assessments. If such assessments had been performed on Nikola from the start, the loss to shareholders and investors, as
well as the embarrassment for GM, could have been avoided.
Weak board of directors
• Board of directors failed to meet any of its primary obligations to shareholders. The leadership skills of the company's
senior executives, institute an executive compensation plan that rewards management for actions that serve the interests of
the stakeholders, and oversee the company's accounting and financial reporting methods because they did not exercise
effective corporate governance, which requires the board of directors to critically appraise the corporation's strategy
direction.
Corporate scandals
• Corporate frauds & Spreading unauthorized information people
Violating Corporate Governance
• Failure that place a hyper-intensive focus on driving profits
Explain the key potential conflicts of interest highlighted in the case and
explain why they undermine corporate governance in the company?
The main conflicts interests that occurred in this case of Nikola is an intricate built on dozens of lies specular
failures in corporate governance.
• The two tiers voting conflict of interest faced by board directors

Individual directors vs Company

Stakeholder vs Other Stakeholder
Why???
• Because corporate governance encourage effective, entrepreneurial and prudent management that will result in
company ‘s long-term success.
 What are the initiative/programme done to curb
the issues identified as in No 2?

From the CEO itself , there are number of things board directors must ensure in managing the company
good corporate governance :
Recognise that good governance is not just about compliance
• Following set of rules, procedures and practices by which the company is controlled.
• Production information and documents in corporate governance
Reach full production demand services
• Providing good services and Estimate Targets
Capable being trusted; trustworthy
• Handling matters in an interactive way
 Conclusion
• Businesses must maintain their discipline, transparency, independence,
accountability for their actions, responsibility, and fairness. Companies
will undoubtedly suffer financial, legal, and reputational consequences in
the absence of efficient governance
• Good corporate governance is critical to improving the integrity and
efficiency of businesses, as well as the financial markets in which they
operate. Poor corporate governance reduces a company's potential and can
lead to financial problems and fraud.
The End Topic Of Nikola Corporation