ACCT 210 – Ch 3 Class Discussion #2: Questions of Corporate Governance

In Chapter 3, we read about the concept of Corporate Governance. According to Investopedia, “Corporate governance is the system of rules, practices, and processes by which a firm is directed and controlled. Corporate governance essentially involves balancing the interests of a company’s many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community.”

Here are a few questions related to this concept of Corporate Governance – please respond to ONE of the following: (PLEASE INDICIATE WHICH QUESTION YOU ANSWERED !!!!)

1) The issue of the size of executive compensation packages is explored in the text. The highest paid CEO in 2016 was Thomas Rutledge, CEO of Charter Communications, who received $98 million in executive compensation. As noted in the text, critics claim that CEOs receive excessive compensation packages when compared with the average worker (271:1). How would you evaluate the fairness of executive compensation and pay packages? Consider the concepts of “agency theory” as part of your response.

2) While on a lunch break following a dispute with a supervisor, an employee updated her Facebook status to an expletive and the name of the employer’s company. Several coworkers “liked” her status. She later posted that the employer didn’t appreciate its employees; no coworkers responded to this online. How should the employer respond? Use ethical reasoning concepts from Chap 1 or 2 to support your opinion.

3) The book states that 40% of occupational fraud is initially detected by a “tip”? Do you consider this a positive statistic? Why or why not?

4) The book discusses the concept of Corporate Social Responsibility (CSR) on pages 127-8, and the concept of business having a social responsibility to do good things and make society a better place. Share an example of a company that you believe exemplifies this and describe what they do and their impact on society.

Please post an initial response of 5-10 sentences by Thursday at 11:59pm.

Reply to at least two classmates in 3-5 sentences by Sunday at 11:59pm. Try to respond to classmates who addressed a different question than you did, to give you exposure to multiple aspects of this discussion!