How to Reform Corporate Ethics in American Business Today Essay

2792 Words Sep 8th, 2013 12 Pages
The Legal Environment of Business
Charles Belote
Colorado State University Global Campus
PLA 390 Portfolio Project
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 Sarbanes-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: Charles E.
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Even though news media have continued to put much of the 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 whose role is to perform the monitoring function. The board of directors is accountable for carrying out the legitimate functions of the corporation. For this reason, it becomes critical for any company to have a board, which is composed of people with outstanding attachments to their name. They need to comprise a team of people with some prestige attached to their name. For instance, 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 carry out their duties for all practical purposes, in regards to 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

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