Corporate Governance: Ethical Theories, Fraud Triangle, CEO Roles and Responsibilities, Securities Fraud, and Agency Theory

Running head: CORPORATE GOVERNANCE
Corporate Governance
Name of the Student
Name of the University
Author Note

1CORPORATE GOVERNANCE
Answer 1:
Ethical theories can be referred to as the rules and principles determining the nature of
right and wrong in regard to the present situation. In this regard, it is worth mentioning that,
ethics can be referred to as the branch of philosophy that has been dealing with the principles of
morality and the standards defining right and wrong (Foreman-Peck & Hannah, 2015). In this
context, mention can be made about the existing ethical theories which can be categorized as-
 Individualism:
The theory of individualism emphasizes upon the needs of an individual before any other
person. In case of business scenario, it refers to the maximization of profits for the company and
its shareholders. The decisions on the part of the company will be such that it will be concerned
with the ones making profit (García-Sánchez, Rodríguez-Domínguez& Frías-Aceituno, 2015).
 Kantianism:
According to the theory of Kantianism, an individual should act rationally and in such
process shall motivate people to act rationally with due respect and motivation (Gottschalk,
2017). The theory emphasizes that in order to stay motivated one should promote goodwill and
be rational.
 Utilitarianism:
According to this theory, business enterprises should aim maximization of profit in the long
run by valuing the happiness of other individuals as well (Harrison & Ryder, 2016). This theory
states that if an action creates nuisance other than being beneficial; then it is considered to be
unethical.
 Virtue theory:
The concept of virtue ethics is such that it emphasizes upon the mind and character of an
individual whether he acted honestly or not (Katmon& Al Farooque, 2017). Virtues are the
characteristics that allows individual to perform ethically while vices are the ones that gives rise
to unethical behavior.

2CORPORATE GOVERNANCE
Business ethics can be referred to as moral principles that have formed guidelines in which a
business operation usually takes place. These principles determine the actions on the part of an
individual involved in such business operation (Harrison & Ryder, 2016). Therefore, business
ethics can be defined as the study of business policies and practices that involves the subject-
matter of corporate governance, corporate social responsibility, fiduciary duties and insider
trading.
It is worthwhile to refer here that Martin Shkreli has subscribed to the theory of
individualism. This is because, according to the theory of individualism, Martin Shkreli acted for
maximizing the profit of the company. This is due to the reason that Martin Shkrelihas already
stated that, the business decision can be considered to be great if it proves to be beneficial for the
shareholders (Kusumaningtias et al., 2016). The action on the part Martin Shkreli can be
considered to be legal and ethical by the theory of individualism however; the profits were
earned by keeping the well being of the people at stake.
Answer 2:
The Fraud Triangle can be defined as the structural framework that has been designed for the
purpose of explaining the reason behind a decision on the part of a worker to commit fraud
related to workplace (Mangala & Kumari, 2015). The Fraud Triangle can create an effect on the
individual that can be categorized as-
 Pressure on the individual:
It forms a motivation behind the crime which can be either personal issues or financial
pressure. However, the nature of the pressure is such that it is unsolvable, orthodox and cannot
be shared with others.
 The opportunity to commit crime:
In this stage, there is an opportunity on the part of the individual to defraud the organization.
In such process, the individual can sense a clear course of action depending upon which they can
abuse their position.
Rationalizing the crime: