Rel228weeksix - REL 228/MGT 228 Business Ethics and Society...

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REL 228/MGT 228 Business, Ethics, and Society Prof. Douglas Lamont WEEK SIX: LECTURE/DISCUSSION Theme for the week: In judging whether corporate America is serious about reforming itself, CEO pay remains the acid test. Also shareholders worry about who will succeed a dominant CEO, such as Warren Buffett and Michael Eisner. The common good and corporate capitalism . Warren Buffett, 2004 Letter to Shareholders of Berkshire Hathaway. I. CEO pay and succession . Council of Institutional Investors . Ann Yerger, deputy director says “It’s pretty clear [the ouster of Eisner as chairman of the board] hasn’t mollified some folks. Former Senate Majority Leader George Mitchell’s promotion to chairman did not meet the Council’s definition of independence for the chairman and the board; because, Mitchell’s law firm Piper Rudnick has received fees from Disney within the last five years. Corporate Library . Nell Minow, the editor, welcomed this change in corporate governance at Disney. Charles Elson, a professor of corporate governance at the University of Delaware, said the chairmanship for Mitchell was unlikely to satisfy Disney shareholders. “It adds fuel to the fire.” Martha syndrome . CEOs tend to make lousy clients for defense lawyers. CEOs don’t always follow direction very well, and sometimes they take a bad situation and make it worse. Leona Helmsley , the New York hotelier was probably not acting on her lawyer’s advice when she said “only the little people pay taxes.” Jeffrey Skilling former president of Enron forfeited his Fifth Amendment rights and agreed to testify before Congress in 2002 about Enron’s collapse. Excellent defense lawyers tell their CEO clients: “Never lie to me, never pay me late, and I run the trial.” Martha Stewart was known to micromanage. She should have taken the Fifth and remained quiet. Source : Tim Burt and Elizabeth Wine, “Disney board to examine post-Eisner future at two-day strategy session,” Financial Times , March 8,2004, p. 1. Joshua Chaffin, “ Celebrities on trial warned: beware of the Martha ‘syndrome’,” Financial Times , March 8, 2004, p. 3. Failure to admit and surrender guilt to priests in Confession, lawyers in pre- trial motions, and judges and jury during trail because our immoral, unethical, and illegal actions have been transformed into shame . We must repent our guilty actions and attitudes, and we must rid ourselves of “false guilt” or shame, particularly when it results from internalizing and making our own the negative judgments others have made about us. The capacity by which one recognizes 1
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the duty to perform acts deemed moral, ethical, and legal was defined as syneid ê sis by St. Thomas Aquinas, a medieval Western Church scholar. Lack of Catholic/Orthodox ethos in America
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Rel228weeksix - REL 228/MGT 228 Business Ethics and Society...

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