Ethics article review
Ethics in business is something that every one wants but few expect. In the past companies such as Enron, WorldCom, and Tyco have all been in the public eye because of unethical practices in accounting. Even with all these and other high profile cases unethical practices are still happening. In a recent article on the MSN Money Website (bizjournals.com, 2006) yet another case has hit the press.
The basis of this article deals with United Health Group Inc. CEO William McGuire. Mr. McGuire resigned his position as CEO and chairman of the board after an independent report found that the company had been backdating stock options as part of executive compensation packages.
The independent study that was released indicated the millions of dollars of stock options had likely been backdated. Back dating of stock options has in the past been done to set the date of the stock when the stocks are at their lowest. This provides higher gains to the executives that receive the stocks as part of their executive compensation. This can result in millions of extra dollars of income to the executives. "The report found that the company had failed to ensure such practices were avoided." (bizjournals.com, 2006)
Mr. McGuire was not the only executive put in the spot light over this issue. In addition to the resignation of McGuire, William Spears, a member of the boards compensation committee also resigned and the general counsel and secretary David Lubben will retire.
From the excerpts of the article that have been provided it is clear that this violation in ethics did not rest solely in the hands of Mr. McGuire. For a general counsel and a member of the compensation committee ...