Corporate Governance and Ethical Consideration

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1. Corporate Governance and Ethical Consideration:

(a) Discussion of Corporate Governance and Ethical Consideration:

Corporate Governance refers to the “principal agent”, this is an individual that is the owner of the organization however, h/she doesn’t have the control of the organization. The concept of corporate governance emphasizes on the relationship of corporation shareholder. World Bank (1999) perceive corporate governance from different point of views that are implicit and explicit corporate governance. The implicit corporate governance emphasizes on the interest of the shareholders and directors whereas the explicit corporate governance focuses on external stakeholders like buyers, seller, retailers and many more (as cited in Kim & Yi, 2014, p. 43). In this article if the Federal Aviation Administration have acted righteously and have cross check the safety measures that were put forward than the crashes might have been prevented.

Accounting Professional & Ethical Standards (APES) 110 code of professional conduct has been introduced by the government for the accountants to be aware of any ill deeds conducted in an organization. The code of conduct has four parts that includes how can different individuals from different sectors can abide by the rules. All of these individuals should be the Member of the APESB (APESB, 2013). The Federal Aviation Administration should be critical of the safety measure not matter how famous or persistent the organization is. These safety measures are there to protect from the disasters that can kill many of the individuals. The two disasters in 2018 and 2019 took the lives of many individuals. After the disasters the Boeing company should have been banned for a while to make them realize.  

(b) Reflection upon Corporate Governance and Ethical Consideration:

After the deadly crashes in 2018 and 2019, an investigation was conducted and it was concluded that the safety measures were rejected by the Federal Aviation Administration. Currently, the regulators all across the globe have banned the company after the second crash in 2019, this has been a good decision by the regulators. Why this is a good decision? The reason for this is the lives of the people are important than exploiting the innocents. The Boeing company is still positive that their plan would be approved despite the catastrophes however, the investigation should not end. The Federal Aviation Administration should also be scrutinized and eliminate their personnel who only care about earning money. Moreover, Boeing is now looking for approvals from the different committees that is a good sign that they are being careful. What ever might be the reason for them to be careful, it will help them to rebuild its image. 

(c) Example of poor Corporate Governance and Ethical Decisions:

An example of a very famous company making poor corporate governance and ethical decision is WorldCom, the senior personnel at the company were guilty of bribery and accounting fraud (Dessain, Meier & Salas, 2008). WorldCom was a telecommunication company in the United States which tried to falsify the revenues on the company’s profit and loss statement, the false revenue was recorded to be approximately four billion dollars. The higher management became greedy and materialistic due to which they abused the code of conduct. The company threatened the corporate governance to be in favour of the company. The company’s growth tactic was to grow through acquisitions (Moberg & Romar, 2003).

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