Despite broad regulatory reforms after the Enron scandal over a decade ago, corporate boards still are not providing the oversight necessary to prevent ethical lapses, according to an article in the Harvard Business Review. Which of the following are likely areas of concern for corporations? Check all that apply. A) Corporations place too much emphasis on pleasing shareholders and not enough on meeting the needs of other stakeholders such as customers, employees, and members of the public. B) Executive bonuses are based on a number of qualitative and quantitative measures rather than just on stock price. C) Corporations focus on meeting short-term earnings goals rather than on creating long-term value. D) Executives’ pay exceeds their value to the organization, as indicated by historical measures.

The correct statementS are A, B, D

Explanation:

The following from the listed are likely areas of concern for corporations;

1) Corporations place too much emphasis on pleasing shareholders and not enough on meeting the needs of other stakeholders such as customers, employees, and members of the public.

2) Executive bonuses are based on a number of qualitative and quantitative measures rather than just on stock price.

3) Executives' pay exceeds their value to the organization, as indicated by historical measures.

A, B, and D

Explanation:

The Enron scandal is a scandal that announced and made popular in October 2001. The scandal relates to the use of complex financial statements by Enron which was difficult for its shareholders and analyst to analyse. It involved complex business model and unethical practices of making its financial statement looks healthy by misrepresenting earnings to give a sign of good performance.

The scandal made Enron Corporation to go bankrupt in 2001 and made one of the five largest audit and accountancy partnerships in the world, Arthur Andersen, to be dissolved.  

AS corporate boards still are not providing the oversight necessary to prevent ethical lapses despite broad regulatory reforms after the Enron scandal over a decade ago, the following are therefore likely areas of concern for corporations:

A) Corporations place too much emphasis on pleasing shareholders and not enough on meeting the needs of other stakeholders such as customers, employees, and members of the public.

B) Executive bonuses are based on a number of qualitative and quantitative measures rather than just on stock price.

D) Executives’ pay exceeds their value to the organization, as indicated by historical measures.