What Are Some Ethical Challenges In Corporate Governance

These three elements are important to what ethical culture the company is portraying. Management must be very clear in the code of conduct, where employees understand what the organization expects of them (Ferrell, et al, 2013). Without a clear and strong written code of conduct, employees and management can act in an unethical behavior as they did in the financial breakdown. During this time customers did not have faith in the financial world because of the unethical behavior. My belief is absent of poorly communicated code of conduct creates an environment for all parties of the organization to behave in a manner that benefits the organization or themselves over the

In the past few years, enterprise integrity has come up on a regular subject of conversation. In the past ten years only, we have seen numerous situations associated with collaborative scams which have shaken the people 's trust in businesses and also the general economic climate. A few of the many salient frauds are the WorldCom and Enron 's scams, the ponzi scheme perpetrated by Bernard Madoff 's, the latest accusations of Goldman Sachs tricking option traders to guarantee the company 's personal profit. Incidents such as these designed us all, as upcoming corporation professionals as well as market leaders, think about ethics and its particular function in the commercial world (Gross, 2010.)

The problem to be investigated is the conflict that can arise within companies between doing what is right (or moral) and doing what is often viewed as more important the attainment of corporate goals. This conflict is highlighted in the case study involving Fannie Mae (FM). (Jennings, 2009) In this case, corporate executives choose to focus on corporate goals and meeting the market expectations, ignoring any moral issued witch conflicted with the attainment of their goal. (Jennings, 2009) To understand the reasons for the executives actions and learn from their mistakes and misjudgments the following topics are reviewed: 1) ethics and social responsibility, 2) the importance of devolution, 3) the power and value of incentive plans, 4)

The article is written to help readers gain a solid understanding the roles of corporate governance, both inside and outside the company. Its goal is simply to impart information, not make claims or arguments on its own. I will be judging it mainly on the sources gathered, numerous examples and explanations given and the overall effectiveness it possesses in effectively communicating its ideas.

Hewlett-Packard Company CEO, Mark Hurd turn out to be mixed up in the workplace. According to (Healthfield, 2012), “Mr. Hurd had failed to disclose a close personal relationship he had with a contractor that constituted a conflict of interest” .”Mr. Hurd also “failed to maintain accurate expense reports, and misused company assets.” This is an example that reflect ethical standards of conduct and financial reporting practices.

Lack of integrity, incomplete discloser, and unwilling to speak the truth are all scopes of dishonesty (Ferrell, Fraedrich, & Ferrell, 2013). Some businesses prompt and participate in dishonorable activities through unethical behavior. This is the very reason why today’s economy faces financial disaster. The Sarbanes-Oxley Act appears to have a strong grasp on controlling the financial environment in organizations; however, other financial disasters will more than likely hit home. Because these transgressions will emanate additional legislation might greatly prevent future misconducts. For this reason, legislations continue to recover with up-to-date implementations.

The problem to be investigated is the application of business ethics. In the business world, ethics are extremely important. Ethics are prime elements that help a business to grow and to become more productive. It is by applying proper business ethics that a business can operate in a moral or ethical business environment and managed to conduct all activities in a manner that maximizes profits while not compromising all other non-economic concerns(Schwab, 1996). Businesses have over the years failed to nurture business ethics in order to fulfill shareholders' interests and to have a culture that is oriented towards profit maximization and high performance(Jennings, 2012; Sims & Felton, 2006). This has led business to have gray areas in their activities. Gray areas are those situations or problems that do not fit exactly into any ethical analysis. These are the activities which may be represented to be immoral as a result of lying and false representations on the part of the business.

Mr Groves’ corporate governance practices were poor, and is currently in legal proceedings regarding interparty transactions, this was certainly news worthy, and damaged the company’s reputation and slowed investor confidence. Additionally, the price paid to companies was deemed to be above market norms, siphoning more money from the companies depleted coffers.

According to Johnson (2012) leaders are powerful role models, and policies will have a little effect if leaders do not follow the rules they set. In Enron case, corruption and ethical misconduct were deeply embedded in their business culture where profitability was more important than ethics. In this paper, I will address the factors that had led to the development of the culture of profit before principle at Enron. Also, I will create my personal code of ethics that will guide me in my professional and personal decision making and doing the right thing when faced with ethical challenges.

The case study that was analyzed is, “Unauthorized Disclosure: Hewlett-Packard’s secret Surveillance of Directors and Journalists,” by Anne T. Lawrence, Randal D. Harris, and Sally Baack. The ethical issues presented through the case deal with Hewlett-Packard Company (HP). HP is a major international company in the computer and technology market. The company describes itself as a “technology solutions provider to consumers, business and institutions globally.” Their credo is called “HP way”, which focuses on points such as trust and respect for individuals, high level of achievement and contribution, business conduct with uncompromising integrity, objectives through teamwork, and encouragement of flexibility and innovation (Newman). The problems faced by HP’s board of directors were a lack of accountability with HP’s credo. If the “HP way” was followed by them, these ethical issues would be avoided. It also promotes a bad example by the high-level of management of this globally powerful organization.

My first reflection related to the case of Nortel. I don’t agree with the “good people” but “bad culture” statement based on two reasons. First, people who made this statement was the employee who also involved in making fraudulent financial performance, these people already loss their moral standards when they chose to do the unethical thing, therefore, their words can’t be trusted and lacking of persuasion. Second, I believe good people will not be influenced by the bad culture, in the opposite way, they will insist on what they believe is the right thing to do and try their best to change the culture. And also good people will not scarify other people’s interests in order to protect their own. They will follow the moral standards when making

2. Ethical Issues in Business. It seems that every day in the news we are hearing of new company that has acted at least unethically and possibly illegally in the operation and financial reporting of their company's business dealings. There are many ethical issues in business. One major issue that we see is over and under reporting net income. Companies like to show that every quarter the net income of the business has an increase or profit. In order to show this they adopt unethical or illegal means in the operation and financial reporting. One such method is the indiscriminate use of stock options for employees that enable companies to take employment costs off balance sheet and inflate earnings. With the recent ethical issues we have

The Committee of Sponsoring Organizations of the Treadway Commissions (COSO) declared in 2011 that keeping a moral tone is an effective way for organizations to prevent fraud. The values, integrity and competence of the company’s leaders and the presence of a positive management philosophy encourage low-level employees to be honest and morally upright (COSO, 2011). When employees observe that executives behave unethically, they become more likely to engage in fraudulent behavior because they see that it is tolerated. Mogel’s Inc. could establish control through a code of conduct covering all employees. The presence of formal policies can only be effective when it is properly and consistently enforced and when competent and trustworthy individuals are rewarded (McNeal, 2011)

Every organization also has a profession responsibility to conduct business honestly and ethically. Our readings reported, “Experts estimated that U.S. companies lose about $600 billion a year from unethical and criminal behavior” Kinicki and Kreitner (2009). The organization could avoid having ethical issues by meeting the

The company faced issues related to the methods it used in investigating the unauthorized disclosure of nonpublic information to the press by the members of its board of directors. Apparently, Hewlett Packard hired some investigators in the case. The investigator used various techniques such as pre-texting- calling the telephone company and pose as someone else with an aim of obtaining that person’s information or records. The company and the board chairman, Patricia Dunn, were defending the company’s investigations about the director and the journalist. They cited that there were aggressive efforts to note the core source of leaks that were fully justified by the investigators