...Whistleblowing and Sarbanes-Oxley Act Student Name College or University Name LEG500 – Law, Ethics, and Corporate Governance Professor’s Title Date Whistleblowing and Sarbanes-Oxley The federal government passed and put into law the Sarbanes-Oxley Act of 2002 (SOX) to primarily protect whistleblowers from retaliation for reporting corporate fraud and financial malfeasance to the government. The negligence became apparent in the 1990’s when corporations such as Enron, HealthSouth, Tyco and WorldCom were found to have grossly overstated their earnings. This cost billions of dollars in losses to shareholders and caused the near-collapse of the stock market (Prentice, 2010, p. 17). The companies were able to hide, scam or misrepresent their earnings due to the dot-com boom, soaring investments, and auditor fraud. The Sarbanes-Oxley Act contains many sections, sub-sections and creation of other agencies to enforce it. It was a sweeping change to standard reporting practices and was created to restore investor confidence, hold corporations and auditors financially and criminally accountable, and protect whistleblowers. Prior to the creation of SOX the whistleblower had no protection from retaliation by the organization. Whistleblowers had fears of criminal prosecution, bodily harm and job loss if they reported the misdeeds of their employer both publicly and privately. The Sarbanes-Oxley Act of 2002 redefined the whistleblower. An examination of the characteristics of a whistleblower...
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...NON EXECUTIVE DIRECTORS A member of a company's board of directors who is not part of the executive team. A non-executive director (NED) typically does not engage in the day-to-day management of the organization, but is involved in policy making and planning exercises. In addition, non-executive directors' responsibilities include the monitoring of the executive directors, and to act in the interest of any stakeholders. Also called external director, independent director and outside director. ROLE OF NON EXECUTIVE DIRECTORS * Provide objective and independent advice to the Board to enable it to make better decisions in the interest of all shareholders * Bring a genuine independent perspective to enhance decision making * Provide value added input to strategy and strategic development * Act in the best interests of the company as a whole rather than any one particular group of shareholders * Assist in carrying out the duties of the Board, such as: * reviewing, approving and on-going monitoring of the strategic plan * reviewing organizational capability in relation to stated objectives * reviewing financial performance against targets * raising capital * reviewing any major changes in the company, such as financial and organization structure * providing advice on major investments/divestments to be made * monitoring legal, ethical, risk and environmental compliance where appropriate * Act as a catalyst for change...
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...-the relationship of the leader to the board has a tremendous impact on the organization’s ability to fulfill its mission. -they work with to create the most effective, strong, and healthy boards possible to serve the organizations that they lead. -The chapters provide a brief overview of the best practice and its relationship to board development. -Join this journey of exploring the best practices of strong and effective boards. guiding the reader from a solid starting point of development by establishing role, purpose and function of the board to knowing and communicating the organization’s mission, vision and values. -Board members intentionally and routinely engage in mutual accountability, communication, evaluations and board development while taking the necessary time to process decisions eliminating unnecessary surprises. Boards unite and resolve to work together through change and transitions for the good of the Kingdom, the advance of the Gospel, and the prosperity of the organization. -to exhibit generosity as board members and to be outstanding examples of giving regularly and sacrificially to the church, college or organizations they serve in order to establishment a culture of board development that embraces the principle of “passing it on,” by developing new board participants that will lead to a strong and healthy future for the organization. - as a board member or as leader of an organization can take your present board environment and develop it into...
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...The role of ethics and compliance in Starbucks is set in place to ensure that all of Starbuck’s staff from the baristas working the front counter to the corporate staff are all abiding by federal laws and regulations. Ethics in financial practices are sometimes hard to believe. The agency problem is the result of conflict of interest between stockholders and the managers of a firm (Titman & Keown, p. 15, 2011). “A conflict of interest is a situation in which a person has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties (“Business Ethics”, n.d.). An example of a conflict of interest would be if the CFO attempted to acquire a property or investment from a friend or family member without acting in the best interest of Starbucks and it’s shareholders. Corporate advisors, in this case a CEO or CFO are legally required to make fair and ethical financial decisions. The Sarbanes-Oxley Act or SOX, passed by Congress in 2002 holds corporate advisors that have access to influence company decisions legally accountable for any instances of misconduct (Titman & Keown, p. 11, 2011). The SOX act is in effect in order to protect corporate shareholders against financial misconduct and accounting fraud. According to Starbuck’s Code of Ethics for CEO and Finance Leaders are required to follow the following seven duties: act with honesty and integreity, avoiding actual or apparent conflicts of interest, provide internal...
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...acknowledgement to all who have contributed to this work in some form: writing this thesis would have otherwise been like swimming through mud. To my supervisor, Professor Andreas van Wyk, thank you for your leadership, patience, and academic skill in guiding me through the research process. To Adéle Mulder and Charl Marais, thank you for your continuous insight and perspectives, both academic and otherwise. And finally to Hilda and Gerrie Steyn, who have been absolutely crucial throughout all my years of study, thank you for your indispensable support, in all its forms. iv SUMMARY The worldwide increase of corporate failures on the scale of Enron and WorldCom has sparked a renewed international trend of corporate governance review. With the external company auditor blamed at least in part for many corporate failures, corporate governance reform also necessitates a review of the statutory regulation of the company auditor. In particular, the lack of auditor independence when auditing clients has been under the legislator’s spotlight. The problems associated with unregulated or poorly regulated auditors are well...
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...Corporate Compliance Plan Introduction Having a good corporate compliance plan is essential to all businesses. Without an effective plan a business will have no clear direction. With no direction a business will surely be in legal turmoil. Once in legal turmoil, a business will fail. Business Overview Riordan Manufacturing is a global plastics manufacturer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. Its products include plastic beverage containers produced at its plant in Albany, Georgia, custom plastic parts produced at its plant in Pontiac, Michigan, and plastic fan parts produced at its facilities in Hangzhou, China. The company's research and development is done at the corporate headquarters in San Jose. Riordan's major customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers. Legal Liability of Administration Riordan Manufacturing’s Corporate Compliance plan is for all employees. Compliance with the program starts with the officers and directors of Riordan. All employees of Riordan are expected to follow the set standards. The administration of Riordan is no exception to the set standards. The Corporate Compliance Plan will focus on the liability of the officers and directors of Riordan Manufacturing. Legal Options When legal...
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...different divisions. There is very less resource sharing between different divisions in terms of materials, infrastructure and knowledge. They are connected to each other by the ‘Tyco’ name and the budget allocation and people policies. All the six divisions are controlled financially. The objective of this system to increase entrepreneurial behavior among the executives and different managers. Tyco in the past had grown by acquisitions of companies of different fields. So, controlling all divisions financially has led to growth of the company in systematic manner. So, Tyco International should not divided into six different companies. Being one company, Tyco gets synergies in terms of financial control of all six divisions and governance structure. The compensation structure defined by centre facilitate the culture for achieving highest growth rate in each division and does not restrict only to achieve bare target. The freedom given to look for companies to be acquired to operational managers increases the entrepreneurial behavior among managers. The managers can themselves judge which company’s acquisition will help the growth of the division to 15 % year to year or more. 2. Is Tyco’s strategy...
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...COMPANY PROFILE Dell Inc. REFERENCE CODE: 8E2C53C7-29AC-4848-9511-9B752758E3B4 PUBLICATION DATE: 24 Sep 2012 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED. Dell Inc. TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..............................................................................................3 Key Facts...............................................................................................................3 Business Description...........................................................................................4 History...................................................................................................................6 Key Employees...................................................................................................11 Key Employee Biographies................................................................................12 Major Products and Services............................................................................20 Revenue Analysis...............................................................................................21 SWOT Analysis...................................................................................................22 Top Competitors.................................................................................................28 Company View........................................................
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...The Japanese corporate governance system differs vastly from the US system. Discuss corporate governance issues that may arise under the Japanese Keiretsu system from the perspective of a).financiers, b). Owners, c). Suppliers, d). Employees. Corporate Governance System in Japan (1) Definition of Corporate Governance Corporate governance deals with the agency problem: the separation of management and finance. This basic agency problem suggests a possible definition of corporate governance as addressing both an adverse selection and a moral hazard problem. The traditional definition of corporate governance was such a narrow view as Shleifer and Vishny (1997) mentioned that the ways in which the suppliers of finance to corporations assure themselves of getting a return on their investment. Recent trend, however, express doubts on the definition that solely focuses on shareholder value. EPA (1998) shows the constituents of corporate governance as follows: Table 1: Constituents of corporate governance Stakeholders | Interest | Desired Management | Shareholders | Maximize profitsAsset protection | Profitable managementSound management | Investors | Efficient investment | Exploitation of profitable investment | Creditors | Protection of receivables | Sound management | Main bank | Corporate growth | Sound managementPursuit of productivity growth | Employees | Pay raiseSecure employment RelationshipPromotion | Profitable managementSound managementSustainable...
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...under Tyco International’s umbrella. Tyco is a vertical structure with levels of hierarchy. The board members and top management are responsible for governing its’ mission and goals while ensuring the organization’s five principles are enforced. Tyco expects each employee to strive for excellence and work as a team. Tyco’s leadership team directs employees to be innovative, openly communicate, and continue to improve their skills. The company focuses on equality and fair treatment for employees. Management and staff are accountable for their actions and work performance. Tyco promotes safety in the workplace. Tyco protects each location by the companies anti-violence, drug and alcohol free workplace policy. Tyco promotes individual and corporate integrity, each person including leaders are to uphold the organization’s standards of integrity with each other, customers, and other stakeholders (Tyco, Peoples & Values, 2010). Vertical structure is the most common business structure; however, many organizations are restructuring their organizations. The restructuring makes communication and innovation easier. At Global Crossing customers are most important and feedback is extremely important. The business structure allows customer service to communicate customers concerns and demands more effectively. Knowing the company cannot survive without customers, Global Crossing has a borderless communication line and allows easy communication without the chain of...
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...Content Page Directors' report 1 Compliance with Code of Corporate Governance 7 Directors' responsibility and approval 25 Auditors' report 26 Statement of significant accounting policies 28 Profit and loss accounts 36 Balance sheets 37 Cash flow statements 38 Notes to the financial statements 39 Statement of value added 73 Five-year financial summary 74 Financial risk analysis 78 DIAMOND BANK PLC Directors' Report For period ended 31 December 2011 The directors present their annual report on the affairs of Diamond Bank Plc (“the Bank”) and its subsidiaries ("the Group"), together with the financial statements and auditors' report for the period ended 31 December 2011. a. Legal Form The Bank was incorporated in Nigeria under the Companies and Allied Matters Act 1990 as a private limited liability company on 20 December 1990. It was granted license on the 15 March 1991 to carry on the business of commercial banking and commenced business on 21 March 1991. The Bank converted into a Public Limited Liability Company on 28 February 2005. The Bank’s shares were listed on the 27 May 2005 on the floor of the Nigerian Stock Exchange by way of introduction. b. Principal Activity and Business Review The principal activity of the Group continues to be the provision of banking and other financial services to corporate and individual customers. Such services include granting of loans and advances, corporate finance and money market activities. At the start of the period...
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...Andrea Carter Case Study “Tyco: I’m Sure That It’s a Really Nice Shower Curtain” Columbia Southern University The author discusses the financial situation of Tyco in regards to the top management misusing funds and falsifying financial documents. The authors’ overall viewpoint seems to be that Tyco’s CEO, CFO, and some of the accountants were constantly trying to evade paying taxes or stealing money from the company for personal use. The company was made out to look bad in the public eye from this article and almost as if they didn’t have a good judge of character when it came to hiring CEO’s, CFO’s, etc. This bad judgment of management picks put the company in a financial bind and caused significant decreases in the market capitalization. The investigation into all of this was time consuming but to many it seemed as if justice prevailed in the end. I think that Kozlowski’s motivation for avoiding sales taxes was that he was simply being greedy for money and trying not to let the company know that he was using their funds to purchase all of these personal items. He knew that on purchases that large, the sales tax would be just as costly and this was his way of scheming to not pay it. The text states that, ‘Business ethics can be defined as the collective values of a business organization that can be used to evaluate whether the behavior of the collective members of the organization are considered acceptable and appropriate” and it was very clear that Kozlowski did not...
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...Corporate Governance and Accounting Conservatism in China* Donglin Xiaa and Song Zhub,** b School of Economics and Management, Tsinghua University, China School of Economics and Business Administration, Beijing Normal University, China a Abstract A principal-agent relationship exists among creditors, shareholders and management, and information asymmetry among them leads to asymmetric loss functions, which induces conservative accounting. This paper investigates the determinants of accounting conservatism using accrual-based measures and data from 2001 to 2006 in China. We find that a higher degree of leverage, lower level of control of ultimate shareholders and lower level of management ownership lead to more conservative financial reporting. We also find that political concerns and pressures among state-owned enterprises are greater than those among non-state owned enterprises, which leads to more conservative financial reporting among the former. However, a decrease in such concerns leads to a decrease in accounting conservatism. Overall, we find that among the determinants of conservatism in China, debt is the most important, followed by ownership, and that board has little influence. JEL classification: G30; M41 Keywords: Information asymmetry; Agency problem; Accounting conservatism; Political concerns; Corporate governance * We thank George Yang from Chinese University of Hong Kong and participants at CJAR Summer Research Workshop for helpful comments....
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...Chapter 9 Topics include IFRS and the roadmap to adoption in the U.S., comparative corporate governance in various countries, global code of ethics, and international auditing standards. IFRS and the roadmap to adoption in the US - Single set of globally accepted accounting standards, from GAAP to IFRS - SEC permits foreign companies to use IFRS without reconciliation to US GAAP - SEC road map assumes IFRS will replace GAAP - SEC questions whether or not to mandate IFRS starting in 2015 o Concerns of the quality of IFRS; is it of high quality and sufficiently comprehensive o Convergence as a “improve and adopt” strategy; improve IFRS before approving it Convergence between both sets of standards is less complex and less costly than complete IFRS adoption Comparative corporate governance in various countries - Effect on corporate governance systems because audit committees and board of director members will have to deal with convergence issues o Investors and regulators look at restatement negatively, so audit committees and board members will need to address this risk effectively o Managing stakeholder expectations in terms of meeting targets and key performance indicators given the changed results under IFRS - These people have to monitor the quality and robustness of the conversion process - Ethical issues exist in corporate governance systems in different countries because business practices and cultural considerations directly reflect way in which companies...
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...Review Volume 15 Issue 1 Special Issue: Comparative Corporate Governance 7-1-2003 Article 13 Corporate Governance in Malaysia Kamini Singam Recommended Citation Singam, Kamini (2003) "Corporate Governance in Malaysia," Bond Law Review: Vol. 15: Iss. 1, Article 13. Available at: http://epublications.bond.edu.au/blr/vol15/iss1/13 This Article is brought to you by the Faculty of Law at ePublications@bond. It has been accepted for inclusion in Bond Law Review by an authorized administrator of ePublications@bond. For more information, please contact Bond University's Repository Coordinator. Corporate Governance in Malaysia Abstract This article examines the corporate governance system in Malaysia. A sound corporate governance system should help create an environment conducive to the efficient and sustainable growth in the Malaysian corporate sector. Since the Southeast Asian financial crisis in 1997 – 98 (‘financial crisis’), corporate governance has become a key policy issue confronting many Southeast Asian countries, including Malaysia. This article considers the distinctive problems of corporate governance in Malaysia, despite several steps for reform that have taken place since the financial crisis. There will be a brief discussion on the meaning of corporate governance and an overview of the present status of corporate governance in Malaysia, in particular after the financial crisis. Keywords corporate governance, Malaysia, Southeast Asian financial crisis ...
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