Financial Management And Corporate Social Responsibility

What is ethically responsible management? How can a corporation, given its economic mission, be managed with appropriate attention to ethical concerns? These are central questions in the field of business ethics. There are two approaches to answering such questions. The first one is Milton Friedman’s shareholder theory of management and the second one is Edwards Freeman’s “Stakeholder” theory of management, two different views about the purpose and aims of a business.

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

The purpose of this paper is to evaluate the legality and ethicality of the corporate governance activities that occurred in an ethics case presented in the text. The paper will provide relevant details regarding the legality of the activities, the criteria by which Sarbanes-Oxley would apply to this case, the ethicality of the activities, whether or not the activities were equitable to internal and external stakeholders, and the next steps representing best interest of all stakeholders.

As details of the Enron scandal surfaced public outrage grew, calling for action, accountability and consequences. Corporate governance began receiving renewed interest. Corporate governance is a multi-faceted subject that sets forth the rules and responsibilities of the relationship between the corporation and its stakeholders (Cross & Miller, 2012). This includes the company’s officers and management team, the board of directors, and the organizations shareholders.

Phenomenal growth of interest in corporate governance has emerged in recent years. The body of literature on the subject has grown markedly in response to successive waves of large corporate failures. Furthermore, there have been numerous attempts to define what constitutes ‘good corporate governance’ and to provide guidelines in order to enhance the quality of corporate governance.

At the time Target was promoting fashionable brands with reasonable pricing, Where as Walmart was focusing on having low prices all the time. This is a major actor for Target because this triggered the top management of Target to re think their strategy and come up with a lower prices strategy to capture those lost customers back from Walmart.

This research paper endeavors to expose how the Sarbanes- Oxley Act of 2002 might have led to the accountability of holding corporate executives for their actions in the past and also in the future. The paper will examine and explore the genesis of the Sarbanes-Oxley Act as well as give details on the act’s relationship to the ethics of the institution and the persons who work and manage the institution. The paper also proceeds to discuss different corporations around the globe that have been endorsed with the Sarbanes- Oxley Act and their subsequent benefits and demerits as opined by different individuals. The paper shall prove to be a relevant tool for any administrator managing a public company. Anyone going through this

In the aftermath of major scandals and bailouts in the United States, the world`s and the public’s confidence in public corporations, has been shaken. With the publicized scandals of Enron and other corporations in the United States, the faith in public corporations fell as fast as the stock market. Investors had no confidence in corporations or in their boards. Measures needed to be taken to form regulations to provide stronger accountability, to prevent these types of scandals from happening and to rebuild the confidence of investors. Corporate governance of publicly traded

The beginning of the twenty first century marked the dawn of a new age, but with its arrival brought a chilling reality that saw the credibility of corporate America being sorely tested due to the scandals that rocked the foundation of capitalism at its heart and soul. This disconnects saw executive management and the board of directors at odds with shareholders and stakeholders over how to attain wealth accumulation while still creating an atmosphere of good corporate governance. This paradigm led some to question that if managers, who are the principal agents of the corporation, act in the best interest of the company or for themselves. Lord Acton once stated, “Power corrupts, and absolute power corrupts absolutely”. There were three specific corporate scandals that led to failed confidence in the financial sector and the subsequent legislation known as Sarbanes-Oxley Act of 2002 which attempted to address this malfeasance: Enron, WorldCom, and Arthur Andersen.

Their employees are united by the strong values of accountability, respect, teamwork and integrity. They make sure that extraordinary ethical standards, and a steady commitment to safety, invade company’s organization. Some of corporate governance has found lacking as following its area;

Corporate governance explains the official rule and regulative parameters for controlling and overseeing the entity (Cascarino, 2012, pg. 131). Responsibilities following the audit committee include keeping up to date safe guards and flow of communication with the auditors (Dogas, C., 2015). Corporate governance clearly explains the “rules, processes, and laws under which entities are operated, regulated, and controlled and includes such the board of directors and the audit” (Cascarino, 2012, pg. 131). After the effects were felt of the first large fraudulent crime of Enron and WorldCom, “the United States enacted the Sarbanes-Oxley Act (SOX) with the plan to widen the duties of auditors, management, audit committees, and boards of directors” (Cascarino, 2012, pg.

The objective of this article was to address the questions “how does the concept of market failure apply to ethical corporate governance? Are corporate ethics authentic in the modern corporation or just lip service? Will Sarbanes-Oxley achieve results?” (Jasso, 2009, p.1). Before they are answered, I want to answer them myself. Market failure applies to ethical corporate governance because the factors that lead up to the failure and after the failure are usually not ethically correct. In other words, corruption was involved and ethics were forgotten, even if they existed. Corporate ethics are authentic in the modern corporation, but it really depends on the company and the people involved.

It seems like business morals and ethics are being whisked to the side in lieu of the ever growing demand of higher stock prices, rising budget goals and investor profits. Despite the increased regulation of corporations through legislation, such as, Sarbanes-Oxley, some corporations still find themselves struggling to maintain ethics and codes of conduct within the workplace. In reviewing the failings of the Enron Scandal, one can heed the mistakes that both individual and organization malaise, such as, conflicts of interest, lack of true transparency and the sever lack of moral courage from the government, executive board, senior management and others, contributed to the energy giant’s downfall.

Corporations the world over have been publicly criticized for improving their firm’s bottom line at any moral or social cost. Ethics essentially “refers to the issues of right, wrong, fairness and justice.” Clearly, examples such as Enron, WorldCom, and even Conrad Black tested society’s views on sound ethical business and the link to what society sees as “good” governance practices. Although the controversies involve issues matched in variety only by the types of companies, they all virtually involve some form of abuse of stakeholders trust. These cases are not representative of the entire spectrum of today’s business environment; in fact, there are a number of companies whose competitive advantages are based on

The purpose of this paper is to highlight the role of external auditing in promoting good corporate governance. The role of auditors has been emphasized after the pass of the Sarbanes-Oxley Act as a response to the accounting scandal of Enron. Even though auditors are hired and paid by the company, their role is not to represent or act in favor of the company, but to watch and investigate the company’s financials to protect the public from any material misstatements that can affect their decisions. As part of this role, the auditors assess the level of the company’s adherence to its own code of ethics.