WHAT WAS THE HIH BOARD DOING WHILE THIS SAGA WAS GOING ON? WHAT SHOULD THEY HAVE DONE? Acquisitions and expansions A review of the chronology of key events, as published by the HIH Royal Commission, will show that the leadership of HIH Insurance has made a series of acquisitions both local and international. As discussed in Wikipedia online (2014), through 1997 and 1998, HIH Winterthur acquired a large number of companies both in Australia and globally, including Colonial Ltd General Insurance's
There are few surprises when it comes to insurance, but when they do come they nearly always bring bad news. Such was the demise of HIH Insurance Limited (HIH): both a surprise (to many) and very bad news for many policyholders. This was the largest failure in Australian business history. Royal commission was appointed investigate re-issue of HIH Insurance collapsed with debt estimated $5.3 billion Australian dollars. ) The reasons behind the corporate collapses were bad management, stratetgic team
Abstract In light of a number of high-profile corporate failures during the first half of 2001, a number of studies have been performed to address the impact of mandatory rotation of audit firms to ensure the appropriate level of ‘independence’ of auditors. Majority of studies conclude that the detrimental effects of firm rotation on the quality of the audit work by far outweigh its positive effects as a safeguard against various independence and quality threats. Frequent changes of audit firms
when financial statements are made public, changes are many economical areas such as market conditions, currency exchange rate and inflations can change the values of assets and liabilities. In this case there often exist discrepancies between book value of assets and their market values. In above case there might be companies that are healthy and many go through period of financial distress. In particular is the threat of not being able to meet debt obligations. The first Indication of financial
White-collar crime results in enormous annual losses to victims and are several times the amount of Conventional or street crimes. The cost of white-collar crime is estimated well below the actual costs to the economy. It affects The collapse of major financial institutions have become major political issues. Harmful activities by corporations put worker’s safety at risk, as well as consumers. Some white-collar crime is still subject to criminal law and the criminal justice, although they are not
Corporate Governance indicates that it is primarily concerned with “System and process by which companies are directed and controlled” with the single overriding objective of all publicly listed companies being its presentation and the greatest practical enhancement overtime of their shareholders investment”. For corporations the corporate governance system will involve the entire network of formal and informal relations and interaction between the board, management shareholders, auditors and other
important clients and giving insufficient or inaccurate information to shareholders can result in misinformed strategic decisions and problems for organisations (Collins, 2006). One only has to look and ponder upon the fate of the large corporations HIH Insurance and One Tel, whom both suffered collapses due to their unethical decisions (Wood et al., 2006). 2 ETHICAL BEHAVIOUR POLICIES AND PRACTICES 2.1 Why ethical behav... ... middle of paper ... ...The Challenge of Ethical Behavior in Organizations
The dawn of the Industrial revolution in the late 19th century resulted in increased mechanisation and industrialisation, giving rise to the era of the Classical Management. The theory was inclined towards providing workers the tools necessary for maximising their efficiency and output. Characterized by an autocratic style of leadership, communication flow was predominantly downward unidirectional, written and strictly pertaining to work. This style of communication worked well and still works reasonably