bus101 assignment5.docx

bus101 assignment5.docx - According to this reading John...

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The Reconstitution Report According to this reading, John Rigas, the founder of Adelphis, and his sons was caught because they are greedy. The illegal things that Rigas family did is to take 3 billion of unreported “loan” to satisfy they personal life. Although most of the members in the board are from Rigas family, they still have public shareholder who expect for financial return from Adelphia. Therefore, when the public shareholders found out this, they were very angry because they did not get the benefit and they got liabilities from its financial statement. Hence, they had been misled and cheated. We think the reason of the failure of this company mainly is that it did not follow the five principle of good government According to principles of good governance, first of all, the company should to select outside directors to fill most positions. However, there are many Rigas’ relatives in the company. Second, the company should hold election for members of the board. In any event, the idea was to give shareholders more control over the selection of directors. The
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