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BADM 2133 UNIT 10
1.
Business Ethics: Cases
and Selected Readings, 7th Ed. Marianne M. Jennings Unit 10 © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2.
Falling Short on
the Basics: Board Issues • Arizona Baptist Foundation − Board lacked expertise − Board did not raise sufficient questions − Board members were involved in the transactions − Board allowed management too much control − Nonprofit board and assumptions about integrity © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 351
3.
Mistakes United Way
Board Made • Board met semi-annually and an Executive Committee of the Board also met twice each year • Neither received material information • Board approved creation of spin-off corporations per Aramony's requests and despite full information • The UWA Board lost control and supervision over the spin-offs • Spin-offs provided compensation perquisites to some individuals and engaged in questionable business transactions which might not have been authorized if the UWA Board had scrutinized them • Annual audits failed to disclose numerous abuses of the UWA accounting system, including: avoiding control procedures, using restricted funds for purposes other than those stipulated, paying questionable fees, and financing transactions with the spin-off corporations • Board had no compensation committee • Board played almost no role in evaluating officers or setting their salaries © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 352
4.
Falling Short on
the Basics: Board Issues • William Aramony and the failure to supervise – Failure to rein in expenses – Personal lives and bad judgment – Nonprofit, assumptions about integrity – Icon status Felicity Barringer, United Way Head is Forced Out in a Furor Over His Lavish Style, N.Y. Times, Feb. 28, 1992, at A1; United States v. Aramony, 88 F.3d 1369 (4th Cir. 1996), cert. denied, 520 U.S. 1239 (1999). © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 353
5.
Stakeholders at Cornell •
Those who funded the research • Those using the research: physicians and patients • The journal editors • The journal readers • Cornell • The foundation • Other researchers © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 354