Adelphia - billion of company money on themselves. 6) Did...

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Evan Brown BUS 101 – CC Dr. Barr 27 January 2011 Adelphia Case 1) Who is the primary stakeholder in this case? Owners 2) How do you know that? (i.e. what specific info did you notice in the case that indicates owners’ interest?) Stockholders (owners), owned 89% of the company and filed a class-action lawsuit. 3) What are the owners’ interests? Their interest was their investment and their money. 4) What is the primary responsibility of a corporate director (or Board of Directors)? A Board of Directors primary responsibility is to establish corporate objectives and develop broad policies. 5) Did the Board of Directors act appropriately to protect the owners’ interests in this case? To answer this, identify and discuss specific aspects of the corporate governance process at Adelphia in terms of how they measure up against the principles of good corporate governance. No they did not act appropriately because they falsified earnings to meet Wall Street expectations, fraudulently excluded liabilities from financial statements and spent $3
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Unformatted text preview: billion of company money on themselves. 6) Did the owners of Adelphia (all of them) act appropriately to protect their own interests? What more could they have done? Yes, they filed suit against Adelphia. 7) How did the government get involved to protect the owners’ interests? Was this effective? What more might regulators have done? The SEC did an investigation of Adelphia’s financial records. They found out that Adelphia was being dishonest with corporate revenue. Regulators might have demanded that Adelphia repay and reorganize their company. 8) How might the Sarbanes-Oxley Act have helped protect the owners had it been in effect at the time of this case? This act would have regulated the power of the Board of Directors and corporate directors. It would have put Adelphia under a tighter spotlight and made them more liable and responsible to their investors....
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This document was uploaded on 11/02/2011 for the course BUS 101 at Miami University.

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