Corporate Governance Concepts Worksheet

Corporate Governance Concepts Worksheet

Concept Application of Concept in the Scenario Reference to Concept in Reading

Unquestioning Obedience to Authority

"I want to give it its due attention but do not plan on allowing the money men to dictate how I'll run this company. Please proceed with invitations for those listed as my choice for directors" (University of Phoenix, 2010, p. 2) "First is the diffusion of responsibility for

seeing and acting. Bystander apathy, the division of responsibility between

specialists and organizations, obedience to the authority, and professional

codes of conduct all contribute to this diffusion. These circumstances make

it easy for information about and accountability for wrongdoing to slip

through the cracks" (Gandossy & Sonnenfeld, 2004, p. 6).

"With so many professional

experts endorsing or ignoring what each knew was professionally and

ethically wrong, they discarded their own individual sense of responsibility,

deceiving themselves into believing that fellow experts who allowed the

misconduct might know better than they did about what was right" (Gandossy & Sonnenfeld, 2004, p. 8).

Corporate Governance

"I would also like to reiterate our expectations that sound corporate governance be exercised by you and your team" (University of Phoenix, 2010, p. 1).

"I know there are some governance things relates to this stuff so make sure we cover that" (University of Phoenix, 2010, p. 2).

"improving practices and procedures in corporate governance that, to varying degrees, provide the basis for strengthening a board's ability and motivation to monitor managerial performance" (Chew & Gillan, 2005, p. 179).

"No organization can be honest with the

public if it is not honest or straight within" (Gandossy & Sonnenfeld, 2004, p. 91).

Reward Systems that Support Ethical Conduct

"We are thus open to the board directorate and the management and board structure, including any equity-based compensation plans you feel appropriate to properly pursue your objectives" (University of Phoenix, 2010, p. 1).

"As a reward for your support, I'd simply like you to be a part of the company but, as your Chairman, I'll handle the real work and you can reap the benefits of placing "Board Director" on your resumes!" (University of Phoenix, 2010, p. 5). "For chief executives, the reward drivers are more money, more power, more influence, and a long-lasting, highly regarded legacy. For business leaders

with a very strong personal moral ethic, the temptation of putting personal

interests (rewards) ahead of those of the company's customers,

employees, and shareholders is rarely, if ever, an issue" (Gandossy & Sonnenfeld, 2004, pgs. 32 - 33).

Ethical Leadership

"I would also like to reiterate our expectations that sound corporate governance be exercised by you and your team. We do encourage the use of "best practices" in this area and will rely on recommendation made by Institutional Shareholder Services for any significant proxy votes" (University of Phoenix, 2010, p. 1). "The Sarbanes-Oxley Act proposed that companies adopt a code of ethics for senior financial officers. The SEC has approved regulations recommending that the code of ethics include both senior financial officers and senior executive officers" (Keinath & Walo, 2009, para 19).

"Failures of leadership to confront problems honestly occur even in sectors dedicated to teaching morality, such as schools and religious institutions" (Gandossy & Sonnenfeld, 2004, p. 40).

"It requires humility, faith in other people, and the willingness to face facts and admit mistakes. And in

real life, leadership is made possible not just because individuals have the right values, but because organizational systems have the right checks and balances, including abundant opportunities for dialogue and dissent" (Gandossy & Sonnenfeld, 2004, p. 49).

Corporate Culture