Legal and Ethical Environment of Business
Using the internet, research and analyze a case involving ethical issues surrounding corporate governance from a global position. A common example may be where a corporate board of directors breached one or more duties, such as the duty of loyalty to its shareholders, although there are many other areas where business ethics are at the center of a case that originated at the governance level of an organization.
Briefly describe the facts of the case briefly and the legal issue. Also, discuss the effect of the case from a global business perspective and on society in general.
Incorporate the legal terminology from your textbook where appropriate in both your original post and in your responses to your classmates. Use academic or legitimate news sources, such as The New York Times, the Los Angeles Times, The Washington Post, CNN, MSNBC, Fox News, etc. Include the link or links used for your research in your post for your fellow classmates to review and to comment on. Do not repeat cases discussed by another classmate.**
Please make sure to comment on at least two classmates’ posts. Make sure your comment is relevant and informative. It is imperative that you demonstrate critical thinking in your own post as well as your responses to classmates. Please remember to log in to class throughout the week to contribute to ongoing legal discourse.
**In theory, two students could log on to class at the same time and begin researching the same case, then post their researched case not realizing another student
researched the same issue. Should you find yourself in this unlikely scenario, please still post the case you researched and e-mail the instructor.**
One example of a case involving ethical issues surrounding corporate governance from a global position is the situation in which the
CEO of Wal-Mart in Mexico was allegedly guilty of arranging bribes to government officials. The CEO delivered these bribes in exchange for
building permits, environmental clearances and zoning variances (Barstow, 2012). The lawyer who was initially involved in the bribery payments
ended up changing their mind and reported the situation to the United States Wal-Mart lawyers. An independent firm was hired to handle the
situation and they suggested a full investigation be conducted. This suggestion was ignored and the investigation was handled by an internal
unit who also recommended a full scale investigation. Wal-Mart officials in the United States essentially ignored the recommendation and
referred the case to the general counsel in Mexico who quickly closed the case with no findings. The CEO of Wal-Mart in Mexico was only
relieved of his position once an investigative article came out revealing all of the above allegations.
This case shows various points in which Wal-Mart’s internal governance systems failed. The biggest way in which this is showcased is
through their culture of silence. This scheme was able to continue for several years before it was ever exposed. The reason it was allowed to
continue was because there was no whistle-blower or integrity hotline (Heineman, 2012). Additionally, leadership within the United States Wal-
Mart was aware of the situation and appeared to hide it from the Board of Directors.
Barstow, D. (2012, April 21). At Wal-Mart in Mexico, a Bribe Inquiry Silenced. Retrieved December 26, 2017, from
http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html
Heineman, B. (2012, April 28). Wal-Mart Bribery Case Raises Fundamental Governance Issues. Retrieved December 26, 2017, from
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