mechanisms? There were driven by revenue They wanted to maintain WorldCom as a client There were arrogant by thinking they would be caught and punished Conflict of interest‚ they felt more responsible to the client rather than the upholding their fiduciary responsibilities Not adhering to their internal controls 3. How should WorldCom’s board of directors have prevented the manipulations that management used? They need to improve their
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case study of company law I. Sarah’s business act and Richforth Ltd. constitution A company is a legal entity that is separate and distinct from its members and shareholders. When a company is legally formed‚ it has become ‘incorporated’ (Wild and Weinstein‚ 2009). As a legal person‚ a company must act in compliance with existing laws and in accordance with the terms of its constitution. Section 33 (1) of the CA 2006 provides: “The provisions of a company’s constitution bind the company
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Issue of multiple directorships has recently came to public concern. It becomes more and more common that directors in listed companies retaining multiple directorships and even some legislators are involved. This situation is popular in Hong Kong and Singapore‚ however‚ many directors in United States are usually involved in one company only. There are serval problems in exercising multiple directorships to listed companies. First‚ director may not meet his function diligently. With regard to
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The Enron and World Com Scandals Enron 1. The board directors failed their fiduciary obligation to protect their shareholders‚ employees‚ and business partners by allowing high risk accounting‚ inappropriate conflict of interest‚ expenses undisclosed off the books activity‚ excessive compensation‚ and lack of independence between the company‚ and board members. I feel the segment that got Enron into trouble was the Executive and finance committee (Brooks). 3. I do believe that they
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In 2005‚ a young man named Joshua Oukrop died as a result of a malfunction in his Prizm 2 DR heart defibrillator. The Prizm 2 DR was manufactured by the Guidant Corporation. The Guidant Corporation had been manufacturing the Prizm 2 DR for several years and in 2002 had taken several steps within the manufacturing process to fix the problem with the devices. Following Joshua Oukrop’s death‚ Guidant officials met with his doctors and explained that they had known about the malfunction and not recalled
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THE HERSHEY COMPANY The scope of this paper is to analyze the kind of agency problems that emerges between The Hershey Company and their stakeholders and shareholders. To answer this‚ a review of the company`s board structure and ownership structure was made. Thereafter two specific situations that has occurred in recent times was used as case examples to enlighten the agency problems suggested to emerge by the corporate structure. Ownership Structure Whinston and Segal defines ownership as
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Faculty of Business and Management BBUS2103 Company Law January 2013 Companies Act 1965 Section 181: Member’s Remedy Name: Mohd Afiq bin Sahar NRIC No: 871226-43-5677 Matric No: 871226435677001 Pages 1. Introduction………………………………………………………………………….3 2. Example of oppressive‚ disregard of members’ interest and unfairly prejudicial or unfairly discriminatory conduct………………………………………5 Diversion of corporate assets or opportunity………………………………...5 Diversion of profits.…………………………………………………………
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The Role of a Board of Directors By Jean Kelsey At first glance‚ one might think that the role of a Board of Directors (“Board”) would be based upon a standard set of criteria that would ultimately make the formation and function of a Board more straightforward. As I researched into the special role a Board would have within a non-profit‚ I discovered that the role is also determined by the functionality of that same Board. Functionality of a non-profit’s Board is clearly dependent upon several
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organization’s endowment problems are a result of a disjointed board of executives; the 13-member board has been operating at only 70 percent for the past two years. Moreover‚ in the last five years‚ several board members have begun to abandon many of their fiduciary responsibilities. Additionally‚ in the past few months‚ this trend among the executives has led to several board meetings to be canceled due to the lack of quorum. Evidently‚ the Smith Foundation has lost its sense of direction for distinct reasons:
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prompted Tan to resign‚ and she brought along some of the Compaq’s employees who assisted in the GEMS project to set up another company Newstead. Personal Automation Mart later transferred the project to Newstead. The court held that Tan breached her fiduciary duties by setting up a competing firm to take advantage of a contract that should have gone to the company. The above case also leads one to ponder‚ since directors are not allowed to take corporate opportunities without the permission of
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