MGT 320 Portfolio Instructions Portfolio Students will write an 8-10 page, double-spaced paper regarding corporate ethics in the post-Enron era from the role of a policy analyst. This paper should...

Running Head: THE LEGAL ENVIRONMENT OF BUSINESS
PAGE
4
The Legal Environment of Business
Running Head: THE LEGAL ENVIRONMENT OF BUSINESS
The Legal Environment of Business
Name
Institution
Memorandum
OUTLINE
1.0
Purpose
2.0
Introduction
3.0
Overview
4.0
Task
5.0
Corporate Governance Issues
5.1 Board of Directors
5.2 Shareholders
5.2.1 Implementation of Independent Auditors from Management
5.2.2 Setting up Effective Accounting Rules
5.3 Modern CEOs
6.0
The Role of Corporate Ethics
7.0
Recommended Policies to be Implemented
7.1 Sa
anes-Oxley Act
7.2 The California State Teachers’ Retirement System (CalSTRS)
8.0
The Required Way to Deal with Corporate Failure
9.0
Conclusion
10.0
Recommendation
To: The president of the United States
From: student
July 30, 2012
Subject: How to Reform Corporate Ethics in America Business Today
1.0 Purpose
This memorandum is specifically prepared to propose the appropriate policies that will need to be implemented to help in preventing the collapse of corporate ethics in the future. Some of the proposed policy avenues that might help in strengthening and further fortifying corporate ethics are also discussed.
The memorandum clearly discusses why the proposed policies are considered an appropriate pathway to reforms and some of the recommendations are provided to the president on how to improve the overall corporate governance.
2.0 Introduction
The modern corporate governance constitutes the stockholders, employees, suppliers and the community in which it conducts its operations. Since the 1800s, the corporate world has been accused of its failures to fulfil its mandated responsibilities. It is not until the start of the last century, that the business community was set free to organize its legal relations in any manner it chooses. The presence of increased industrialization towards the end of the 19th century gave rise to labour unions, which led to increased concentration of economic power into the hands of huge trusts, and ro
er barons that resulted in increased injuries in the workplace-giving rise to the demand of consumer protection and product accountability (“The Legal Environment of Business,” n.d.).
3.0 Overview
In building and communicating a corporate identity, there must be a conjunction between the organizational leaders and the respective employees. The influence that leaders have on ethical practices greatly affects the kind of authentic leadership that addresses awareness of moral values and business perspectives. In most cases, corporate leaders attempt to implement corporate measures that they expect from their various stakeholders on the required code of conduct and behaviour. It must be noted that ethical identity cannot be achieved by only stating and executing against the required ethical values and principles in a mere corporate mission statement. Rather, corporations are identified as being either more or less ethical by constantly evaluating the level to which they clinch to social responsibility and responsiveness. To this extend the ethical dimension of any corporate ethical identity (CEI) may be termed as the rule of behaviour, communication, and values that represents the organizational ethical dimensions and beliefs which includes the ethical values, behaviour and communication (Kleyn, A
att, Chipp & Goldman, 2012).
4.0 Task
The main task of this memorandum is to identify the major issues that involve the board of directors, shareholders and modern CEO in corporate governance. In addition, the task includes the identification of suitable recommendations that need to be implemented to increase the effectiveness of corporate governance in the post-Enron era.
5.0 Corporate Governance Issues
5.1 Board of Directors
The major concern of corporate governance is on the board of directors, the respective independent directors and the board’s committee. Judicial investigations into some of the corporate scandals have revealed that insufficient ethical mistakes of senior management borne by the board of directors have continued to be a rule of the game in the business world. Even though news media have continued to put much of their focus on the defaults of high-powered executives, the crucial governing authority of any corporation will always remain on the corporate board of directors (Hoffman & Rowe, 2007).
The major concern of the corporate governance is mandated to the board of directors who whose role is to perform the monitoring function. The board of directors is accountable for ca
ying out the legitimate functions of the corporation. For this reason, it becomes very critical for any company to have a board, which composes of people with outstanding attachment to their name. They need to comprise a team of people with some prestige attached to their name. In addition, the board members need to be people with good know- how and experience in the business. Their engagements in business need to demonstrate a level of confidence to both the expertise and stock purchasers (Yuhao, 2010).
However, there have been consistent failures of this board to ca
y effectively out their duties concerning effective management of the corporation. More often than not, their failures have been reported regarding the directors approach of directing power to the CEO causing the corporation to indulge in dangerous accounting practices. In addition, questionable practices have been ca
ied out by these same directors, to the detriment of shareholders, employees, and...