The Role Of Ethics In Recent Corporate Scandals

THE CORPORATE BOARD IN THE UNITED STATES:
In today’s business world, characterized as the information age, where media has extended its boundaries to reach even the smallest of populations across the globe, the Board of Directors of all corporations must go to extreme measures to maintain due diligence in every aspect of their duties in managing corporations. Any corporate transgressions can be immediately disclosed to the world through television, radio and most recently the Internet. These perceptions of misconduct, whether true or false, can greatly affect the corporations’ position in the marketplace. Because of the critical affect that inappropriate conduct on the part of Directors and corporate management has on the future of the corporation in addition to the adverse affects on all of its stakeholders, the United States government passes the Sarbanes-Oxley Act of 2002. This act was initiated in order to create a specific framework for auditing all functions of Board members to circumvent corruption as well as to encourage improvements in the stock market. Improving the confidence of stockholders in the United States was also a major consideration in the implementation of this legislation (Thompson, 2005).
Prior to the passing of the Sarbanes-Oxley Act, several infamous cases of corporate misconduct surrounding major corporations in the United States caused serious repercussions and devastation to shareholders, employees and other stakeholders that were in most cases irreversible. This paper will review the following corporations and the roles that their corporate Boards played in the corporate unethical activities that lead to major scandals in the United States: Enron, Worldcom and Adelphia.
ENRON CORPORATION:
Undoubtedly the most notorious example of corporate misconduct, in recent times, is the case of the collapse of the Enron Corporation after serious criminal investigation for improper accounting practices. Enron came into existence in 1985 through...