Ethics Assignment And Presentation Example

Ethics Assignment And Presentation Example Ethics Assignment And Presentation â€" Assignment Example > IntroductionCorporate scandals in most cases involve ethical lax and poor corporate social responsibility (Shuhui Matthew, 2012). After the scandals, the business suffers loss while others collapse. Companies such as Enron saw a decline in their stocks after their scandals which affected the shareholders. Most of the decisions leading to a corporate scandal are ethical dilemma. A global corporate collapse as a result of scandal acts as a defining moment for the contemporary corporate governance debate (Colley, Doyle, Logan Stettinius, 2003). The collapse of Lehman brothers and the HIH insurance has been some of the largest corporate scandals. This case investigates the collapse of HIH insurance and the Lehman brothers to prepare a case for presentation to board of directors. The report looks at the facts relating to the corporate scandal and how it occurred. The case also looks at the existing similarities between the two scandals, stakeholders involved in the scandals and how t hey were affected. It also includes ethical, legal, accounting, and corporate governance issues and how they occurred and comparison with Enron scandal. Lastly, the essay suggests the improvement and changes based on the theories of utilitarianism and deontology to regulations and codes of conduct to ensure that these scandals do not happen in future. Facts relating to the scandal and how the scandal occurredHIH insuranceHIH insurance failure is one of the largest corporate failures in Australia which occurred in 2001. This led to the federal government to establish a royal commission to carry out the investigations on the failure. HIH was seen to have a conservative corporate culture. This made the deficiencies in governance which made its failure to be a surprise to many. The CEO was charismatic and dominating. Over the years, HIH engaged in high risk practices in highly competitive markets. Another problem which faced HIH insurance was lack of independent directors. Three of th e eleven directors were former partners as the company auditor firm known as Arthur Andersen. This made it easy for the few independent directors to be misled on the true firm financial position (Owen, 2003). The company had an aggressive acquisition strategy which aimed at attaining growth at all costs. The firm also had a culture of not giving bad news to the stakeholders. This led to a conflict between profit maximisation and good corporate governance structures (Shuhui Matthew, 2012). HIH had bad management which lacked a well understood policy. The group had deficiencies in its corporate culture and structure. There was filtering of information through unscrupulous accounting which disguised the serious financial crisis faced by the firm. Lack of professional skeptism led to the failure. The firm also failed to deal with accounting anomalies which would have helped in resolving the crisis. HIH is one of the most notorious Australia corporate scandal and collapse was a subjec t to Australian $40 million Royal Commission. HIH was rated as the second largest general insurer at the time of liquidation in 2001(Owen, 2003). Lehman brothers’ caseThe fall of Lehman brothers in September 2008 remains one of the largest bankruptcies. The company assets were worth $639 billion. The company was formed in the 1850s by Henry Lehman and his brothers. The bank expanded to become one of the largest investment banks globally. Due to its size, the bank was complex and advanced with opaque structures. Before the collapse, the business areas of operations were fixed income, equities, investment management and capital market (Wiggins, Thomas Andrew, 2014).