Tylenol capsules laced with cyanide kill seven people
Customer safety ahead of profit as the company recalls $100 million US worth of
product and offers reward for information leading to arrest
"Gold Standard" for corporate crisis management
Market share lost due to scare is regained within one year
Bre-X
Gold deposit scandal leads to biggest corporate fraud in Canadian history
Stocks become worthless
Livent Inc.
Co-founders misappropriate $4.6 million and are convicted in absentia
Lawsuit pending against auditors Deloitte & Touche for failure to protect creditors and other stakeholders
Creditors and shareholders lose millions
Enron
Accounting fraud inflates assets and revenues
Shareholders Deceived
Possibly the most well-known example of willful corporate corruption and fraud
The impetus behind enacting the Sarbanes-Oxley Act of 2002 in United States
SNC Lavalin Group Inc.
Multiple allegations of bribing officials millions of dollars in Libya and Bangladesh in order to secure contracts
World Bank cancels $6.2 billion dollar loan needed for Padma bridge project in
Bangladesh and banned from receiving further development loans for ten years
Stock values plummet
Why do companies engage in ethical behaviour?
1. Companies engage in ethical behaviour in order to build and maintain strong relationships with suppliers,
customers and shareholders that are characterized by trust and goodwill. It is difficult to maintain long term
business success without the goodwill of these key stakeholders
2. Companies engage in ethical behaviour to avoid the penalties associated with
acting unethically such as fines and sanctions.
Why do companies engage in unethical behaviour?
1. Companies engage in unethical behaviour in order to "protect" the business
and "buy more time" as when financial statements are misreported to maintain
stock prices even though the business may be in trouble.
2. Companies engage in unethical behaviour such as bribing international officials in
order to secure contracts and compete on the world stage.
3. Management of companies engage in unethical behaviour for personal gain
as when company funds are misappropriated by individuals.