13.5: Corporate Culture and Business Practices

Corporate Culture and Business Practices

• Lack of meaningful long-term corporate planning and focus
• Creation of a “culture of greed” and management self-enrichment: materially more generous compensation pattern for the CEO and senior executives than peers
• “Make the numbers!” corporate culture: untoward pressure on managers to achieve aggressive budgets
• Creation of a “culture of fear,” penalizing internal debate and independent or creative thinking; creation of environment where only “good news” is acceptable to corporate chieftains
• “Take no prisoners!” corporate culture: questionable or heavy-handed strategies and tactics with competitors, customers, employees, suppliers, accountants, bankers, business partners, and regulators or government authorities
• History of litigation in pursuit of business strategies and undue pressure on critics (e.g., lawsuits by company against company customers, employees, suppliers, accountants, bankers, regulators or government entities)
• Lack of transparency: history of lack of openness with external and internal constituencies, including independent directors
• Heavy use of lobbyists and lawyers
• Aggressive corporate communication and image building; heavy use of “spin”
• History of aggressive or questionable sales and/or marketing practices
• Cavalier attitudes toward internal control