Question

GlobalMutual was, by all accounts, a model insurance company Profits were strong and had been for several years in a row. The company carried the highest ratings in its industry, and it had recently been voted one of the top 100 companies to work for in the United States in recognition of its very employee-focused work environment. GlobalMutual offered very generous benefits: free lunches in the cafeteria, onsite day care facilities, and even free Starbucks coffee in the employee break rooms. In an industry that was still struggling with the massive claims after a succession of hurricanes in the United States, GlobalMutual was financially stable and positioned to become one of the major insurance companies in the nation. So why were the CEO, William Brown; the CFO, Anne Johnson; and the COO, Peter Brooking, all fired on the same day with no explanation other than that the terminations were related to issues of conduct? 1. Who would most likely have intervened to terminate the senior team over issues of conduct? 2. Give some examples of the kind of ethical misconduct that could have led to the termination of the entire senior leadership of GlobalMutual 3. Was it a good idea to fire them all at the same time with no detailed explanation? 4. How are the stakeholders of GlobalMutual likely to react to this news? Explain your answer.. Source: Adapted from George O'Brien, "A Matter of Ethics BusinessWest 22, no. 4 (June 12, 2009 As

Answer 1

1. The most likely individual or group to intervene and terminate the senior team over issues of conduct would be the company's board of directors. The board of directors typically oversees the actions and performance of top-level executives and has the authority to make decisions regarding their employment.

2. Examples of ethical misconduct that could have led to the termination of the entire senior leadership of GlobalMutual may include:

- Financial fraud or embezzlement: Manipulating financial statements or misappropriating company funds for personal gain.

- Conflict of interest: Engaging in activities that create a personal or financial conflict with the interests of the company.

- Insider trading: Illegally trading stocks based on non-public information.

- Misrepresentation or false reporting: Providing false or misleading information to stakeholders, regulators, or the public.

- Harassment or discrimination: Creating a hostile work environment through inappropriate behavior or discriminatory practices.

- Breach of fiduciary duty: Failing to act in the best interests of the company and its stakeholders.

3. Whether it was a good idea to fire them all at the same time with no detailed explanation depends on the specific circumstances and reasons for their termination. Generally, providing a detailed explanation for such high-profile terminations can help maintain transparency and credibility, especially when it comes to reassuring stakeholders about the company's commitment to ethical standards and accountability. However, there may be legal or confidentiality reasons that prevent the immediate disclosure of specific details.

4. The stakeholders of GlobalMutual, including employees, customers, shareholders, and business partners, are likely to react with concern and skepticism to the news of the senior leadership terminations. Without a detailed explanation, there may be speculation and uncertainty surrounding the reasons for their dismissal. The company's reputation and credibility may be negatively impacted, and stakeholders may question the ethical standards and governance practices within the organization. It will be crucial for the company to proactively address these concerns, communicate transparently, and take appropriate actions to restore trust and confidence among its stakeholders.

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