1. What new and innovative mechanisms, laws or practices could corporate America put in place to address the corporate misconduct that we often find in the news? The law already makes the board of directors liable to the corporate America to insure that their officers are acting in a legal and prudent manner while running their corporations. One method of insuring that the board of directors are compelled to check on the mysterious activities of their corporate officers is to make use of the internet.
If corporate America would require that all corporations should make their important business transactions such as work biddings won or major sales available for public viewing through the internet, then we are given an automatic handful of eyes watching at them. The public records should provide the reasons why the bids were chosen or the reason behind the sales. So that for the corporate misconduct that we often find in the news like the Boeing scandals involving Boeing Chief Financial Officer Mike Sears and Darleen Druyun, chief acquisitions officer at the Air Force.
“Druyun said at her sentencing hearing in 2004 that said she favored Boeing on multiple contracts because of favors granted by the company, including hiring her daughter and son-in-law” (Gates & Mundy, 2006). Corporate America can compel the board of directors to investigate officers involved in misconducts or face legal sanctions themselves. The officers in turn are liable to run their corporation legally and in a prudent manner.
The Sears and Druyun Boeng scandal led to jail terms for Mike Sears and Darleen Druyun. If the major transactions of Boeing were made public through the internet, then there is a big chance that a handful of people have detected such an anomaly prior to it becoming a big problem. Sears and Druyun would also be prevented from doing such anomaly knowing that there is a possibility that people are looking at their transactions. 2.
Can you think of any protective practices that the corporation could include to better protect against deceptive and destructive business practices of bad corporate officers? One effective practice is transparency across all members of the corporations, from board of directors, corporate officers, employees to shareholders. A corporation should require transparency, meaning all major business decisions and transactions made by corporate officers are made available to all members of the company with proper explanation of purpose and reasons.
Transparency eventually promotes honesty and prevents destructive business practices of bad corporate officers. References Gates, D. & Mundy, A. (2006). Boeing lawyer warns of company’s legal peril. Retrieved on April 24, 2007 from the SeattleTimes online web site: http://seattletimes. nwsource. com/html/businesstechnology/2002772936_boeing31. html The attached module8notes. pdf was used as the main reference.
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