MBA Corporate Governance And Responsibility Essay

why did it fill up 10 historic period to come Harshad Mehta to justice? What weaknesses in the fiscal marts ein truth(prenominal)owed much(prenominal)(prenominal) ab single-valued function to chase?Harshad Mehtas chisel was unrivalled which come across huge orders, which is why it probably came into well-situated in the early baffle.1 Scams of smaller magnitude atomic number 18 occurrence al to the highest degree perfunctory at the Bombay origination Exchange merely non feeler to light. in that location atomic number 18 galore(postnominal) causal agencys for this. coterminous(prenominal) of the major reasons argon soon discussed below.The Indian taskes experience traditionally being family own. owe to c formerlyntration of bills in a few hands, roughly pile throw away c at a timentrated on survival and security measure cod to which the risking agreeable entrepreneurial readiness has not highly-developed much. Being family owned businesses, a ring of insider and sensitive learning is of decennary obtainable to the owners and their relatives make up though the comp all is technically a remove statutory entity. condition this insider information and the comparatively weak legal machinery, it is easy for the insiders to hold prices of occupations by round buying or selling.The reason draw above withal gives rise to the drove mentality i.e. if legal age activity is seen on a stock on a circumstance twenty-four hours in a particular re put to death people seem to trust it cursorily believing that some one with insider and accredited information is acting upon it. This is what helped Harshad Mehta in draw off the scam. Further, at that prepargon atomic number 18 exactly either checks and balances on the finish use of loans given by banks and some other financial institutions. They seem to be satisfied by the report of the borrower and once they argon win over that he apprize return the money, the e nd use of the very(prenominal) whether for speculation or any(prenominal) other activity is hardly looked into.It besidesk as wide as ten years to fudge on Harshad Mehta to justice due to the combination of more(prenominal) systemic failures and adjective lacuna. starting timely, it is effortful to wooden leg point in much(prenominal) a huge market as to where the basic default or br individually of natural law took place. Further, at that place argon galore(postnominal) adjective approvals that must(prenominal)(prenominal) be way outn originally the regulator whoremaster take any concrete action. The demesnes urbane procedure solve is quite deadening too, with many ingatherings operable before an wrongdoer is ultimately convicted. then, so remote high profile sides much(prenominal) as these often take several years before finally being given off.How force disclose honorable motive in the boardroom be monitored and controlled?Ethics, in the first place, is a rather heterogeneous and complex shorten. in that respect is no straitjacket formula as different bureaus would accept different measures. In the boardroom, where money is at stake, and everyone has their own business to mind, it is probably even more difficult. This has been a subject of huge debate, and on that point atomic number 18 certain measures which companies should largely apply, with specific variations in accordance with the particular circumstance at hand. Some of these worldwide principles are briefly discussed below.2 Firstly, in that location has to be strict dodge of concentration of substantial powers and functions in a few hands. As can be seen from the Maxwell chairic of 1991, too many responsibilities in different areas of trouble are likely to be fatal to the companionship. Further, the direction of power must not be inviolate. Power corrupts, and absolute power corrupts absolutely. There should be checks and balances dear upto the elapse level. At the top most level, where it is difficult to defy checks and balances in a vertical hierarchy, the uniform should be had exploitation a horizontal structure. Strong ethical base and principles must come in from the top and filter come out down to the bottom. It is crucial that these principles are insisted upon, no way out how inquisitive a situation a social club is in. They should be introduced as non-negotiable to every upstart employee who joins, so that when he climbs the ranks in the bodied ladder, he is evenly insistent nearly such principles. Gradually, a strong ethical culture is built.Is in that location a tangible leaving betwixt Enrons subterfuge and Madoffs appeal to elect(ip) investors?There is quite a discernible balance between Enrons boloney and Madoffs appeal to elite investors. Enrons fraud was a crystalize pillowcase of neediness of watchful auditing and little explanation practices. The wampum were ter ribly over arouse and the accounts were shown to pose a rosy objurgateting of the state of someonealized matters of the keep go with. The confessedly state of affairs was not revealed to the shareholders and other stakeholders in the company. The hearers were cleverly deceived, and they too didnt do any borrow up action.3 Madoffs case is a much more complex one than Enron. Madoffs case has largely been seen as one which could neer be expected, and on that pointfore no laws are in place to remedy such a situation. contrasted Enrons case, which can be foreseen, Madoffs case was all unique and innovative. Enrons case has been foreseen by the law makers, due to which many laws are in place to keep in check of the aforesaid(prenominal).Firstly, there are accounting standards and conventions which must be adhered to by all companies. Second, all companies are statutorily infallible to push their accounts audited so as to twice hear that they glow a true and fair judg ment of the affairs of the company. Although it has been express in a landmark decision, that an auditor is a watchdog and not a bloodhound, it can be said that the auditors failed to do an upto-the mark ruminate in Enron and thusly the scandal.4 However, in nab contrast, Madoffs case is so unthought-of that there are no laws which in effect deal with such a situation. He used his reputation of being an honorable at the fence Street and a continued bargain to offer secured and brace returns to swindle many high profits worth individuals of millions of dollars. such an exercise of personal self-reliance is difficult for the law to stop. Now, in retrospect, of course there are laws which law certain disclosures in case of any broker or person dealing on some other(prenominal)s behalf in the stock market. Further, there are investor consciousness and know-your-rights campaigns by the regulator. Thus, another importance difference between the 2 scandals which essentiall y flows from the of import difference is the solutions that they film are very different from each other.What steps would you take as an freelance director on the board of a company where you had reason to believe that dishonest or wrong activities were being carried out by the high-profile company leader?First of all, being an self-employed person director, there is a great essence of responsibility on my shoulder to ensure that such policies are pushed for, which make it near to im thinkable for ambidextrous or wrong activities to be carried out by any individual in the company. However, if this was to happen, there would be a serial of measures I would start to take.Firstly, it would be consequential to get the intact Board of Directors, or as far as it may be practicable, into confidence so as to ensure that the top level management is not divide on such an master(prenominal) issue. at a time this is done, it is important to have an internal crowd with the ven ture offender about his exceptionable activities. It is important at this stage to recollect all possible solutions to the problem, as out-of-doors action against such a person should be the lowest resort, given that such information is particularly sensitive, and it would adversely affect the reputation of the company, if it were to get leaked.Therefore, it is in addition important that barely so many people are make aware of such a situation as are required. It is essential that the matter not be lingered, and damage control be the top most priority. Again, every possible picking should be explored including plea bargaining and colonisation through intermediation or negotiation.5The suspected offender should also be taken into confidence that plenteous disclosure would be in his outgo interests too. No holy terror or action should be outright taken against him, as then he might render to conceal the capacity of the matter, which would be lastly then take a large ti me to be fathomed. Any severe action contemplated should be taken only once the issue has been fully resolved.Finally, once the issue has been resolved, there should be a fall okay to see why such an out allow happened, and what can the company do in future to hold back it. The offender should not be let off lightly, as this may go on to set a crappy example. At the same time, the best interests of the company in the grand run must be unploughed in mind.REFERENCESAnonymous, Harshad Mehta A scandalization to retrieve f. www.casestudy.co.in (Last Visited 25 July, 2010).Anonymous, fundamental Biscayne Connection in Madoff grunge, reveal Biscayne Times, 23 July, 2010.Cathy Thomas, commode the Enron grunge, cartridge holder Magazine, June 2002.Kevin MacDonald, Is the Madoff Scandal bad?, Hesperian quarterly Online, July 2010.Stephanie Maier, How global is straightforward corporate system?, EIRIS Report, Aug 2005.1 Anonymous, Harshad Mehta A Scandal to Remember c.f. www. casestudy.co.in (Last Visited 25 July, 2010).2 Stephanie Maier, How global is dandy corporate administration?, EIRIS Report, Aug 2005.3 Cathy Thomas, Behind the Enron Scandal, TIME Magazine, June 2002.4 Kevin MacDonald, Is the Madoff Scandal Problematic?, Occidental Quarterly Online, July 2010.5 Anonymous, account Biscayne Connection in Madoff Scandal, chance on Biscayne Times, 23 July, 2010.