What is the rationale of the european position

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Reference no: EM133203914

On Moral Judgments

On Moral Judgments: If you firmly believe an action is moral, might you be wrong? Provide a strong paragraph or two with an example to help support and explain your response. Be sure to define what 'moral' means. Remember, this is a live, open forum and these are big issues. You are encouraged to read and respond to your colleagues with utmost professionalism.

Virtues of Aristotle
Among the ten virtues of Aristotle from my lecture today, which one is the most important to you and why. In your strong paragraph or two, define the virtue and also the two extremes outside of the 'mean'. What must you do to bring yourself closer to the mean (the virtue) or what must you do do sustain your position to be a person of virtue.

1) There are several people in the film who had positions of power within Enron and still allowed the deception to continue. Of all the cast of characters, which one do you think was most at fault for the Enron scandal - be specific.
2) Why do you think the scandal was able to grow as large as it did?
3) In 2001, when Enron filed for the largest bankruptcy in corporate history at the time, it was the seventh largest business in the country with $63.4 billion in assets. How is it possible that a company this large became such a scandal? Do you think there are still corporations like Enron today where financials are overblown? Explain.
4) Lastly, where are the main characters today: Ken Lay, Jeff Skilling, Sharon Watkins, Andy Fastow, and Lou Pai?

So - what is your philosophy of justice? Keep it simple and clear. Provide an example of justice according to your philosophy and what type of training/tools/education/institutions is/are needed for a society to achieve and/or sustain your idea of what is just.

A large majority of states in the US, including Delaware, where many companies are incorporated, stipulates the primacy of the shareholders over other stakeholders. In the EU, the law and/or the various governance codes, in a majority of countries stipulate the primacy of the company's interest i.e. the combined interest of the various stakeholders (customers, employees, suppliers to name a few). This is a fundamental difference with broad implications. The American reasoning goes somewhat as follows: if directors look out for the long term interest of shareholders they will also be deemed to have taken care of the corporation's other stakeholders. European reasoning for the most part stresses the interest of the company as a separate entity from its shareholders and as a confluence of different interests that must be balanced. The European model holds that Directors (board members) are expected to look after the interest of the company and the American model holds that Directors are expected to look after the shareholders. In many European countries shareholders cannot bring legal action against a director only the company can take such action. The two models are quite different indeed.

Your questions to address:

Question 1) What is the rationale (mildly noted above) of the American position on governance - shareholders (owners of the company) are to whom the board is accountable.

Question 2) What is the rationale (mildly noted above) of the European position on governance - stakeholders (not necessarily the owners) are to whom the board is accountable.

Question 3) So - what is your position? If you owned a company or held ownership in a company, would you want your board and executive team to accountable to you the owner or other stakeholders? Or, perhaps both?

Question 4) Finally, U.S. law stipulates that corporations can have the CEO and Chair of the Board be the same person. European Union law stipulates that corporations need to have separate CEO and Chair of the Board. What are the benefits and risks of both?

Reference no: EM133203914

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