Ethical Obligations and Decision-Making in Accounting 2nd Edition by Steven Mintz, Roselyn Morris

Exercise 8

On August 9, 2005, Chancellor William B. Chandler III of the Delaware Chancery Court[1] ruled that the directors of the Walt Disney Co. acted in good faith when Michael Ovitz was hired in 1995 to be the CEO of Disney and then allowed to walk away fifteen months later after being fired by Michael Eisner, the chair of the Disney’s board of directors, with a severance package valued at $130 million.  Discuss the role and responsibilities of a board of directors in matters such as this? Is it “fair” that Ovitz was allowed to walk away with such a lucrative severance package only fifteen months after being fired? Include in your discussion what is fairness in this instance from an ethical perspective.

Step 1 of 3

Ethics:

Ethics is the set of some moral values and principal that differentiate right and wrong morally.

Corporate governance:

It is a set of rules, laws, and regulations under which business organizations operate. It helps the organization to work smoothly. It ensures transparency between management and shareholders.