March 18, 2013
Ethics and Compliance
Ethics is important for any corporation to succeed. Walt Disney Company is no exception. The Disney Company started October 16, 1923, as The Disney Brothers Studio (The Walt Disney Company, n.d.). This was before the Sarbanes-Oxley Act, or SOX Act, was in existence. The Securities and Exchange Commission (SEC) is the one to implement rulings to comply with the laws. In 2011, Disney started a cruise line and broke ground on Shanghai Disney Resort. Compliance training, including training regarding the Company’s Standards of Business Conduct and ethics, is provided to employees and Cast Members worldwide through the Company’s learning management system known as Disney Development Connection (The Walt Disney Company, n.d.). Roles of Ethics and Compliance
The Walt Disney Company understands the importance the ethical social responsibility to communities and shareholders. In an effort to maintain ethical company standards, the Walt Disney Company created an independent board of directors and commissions independent registered accountants to ensure an ethical financial environment (The Walt Disney Company, 2012).
The independent board of directors consists of nine to 21 members, normally no more than 13. The Walt Disney Company demands the board of directors to adhere to Corporate Governance Guidelines noting the importance of ethically representing the shareholders. The board of directors’ duties includes reviewing proper management, evaluating and approving the company’s major financial goals, plans, and actions, evaluating and approving compensation of the Chief Executive Officer, and evaluating major senior executives (The Walt Disney Company, 2012).
The Chief Executive Officer discusses and obtains approval from the board of directors prior to taking major action. Any significant changes to financial structure control of company, acquisitions or dispositions, or entering into a new type of business is board of director approved protecting the company and the shareholders (The Walt Disney Company, 2012).
Corporate Governance Guidelines displays the importance of maintaining an independent board of directors. A board members relationship with the company within three years prior to board election disqualifies the member from the board. Additional disqualification from the board note immediate relatives earning more than 120,000 dollars with twelve-month period during the previous three years. Nor shall a director employ immediate family to provide professional services to the company. Board members maximum length of service is 15 years. The guidelines demand an independent board to ensure no material ties to the company to reduce possible unethical financial decisions that benefit the member over the company and shareholders (The Walt Disney Company, 2012).
A board of committees assists the independent board of directors to review adequately and evaluate actions. The committees consist of the Executive, Audit, Compensation, and Governance and Nominating committee each committee focuses on ensuring compliance with ethical decisions (The Walt Disney Company, 2012). The Walt Disney Company demands managers and the board of directors to comply with company’s polices and civil laws to uphold the company’s financial integrity. Procedures for Ethical Behavior
According to The Walt Disney Company, (n.d.) “It is the company’s intent, through its compliance training to insure that all of its employees and cast members have the knowledge and training to cat ethically and legally, in compliance with the company’s Standards of Business Conduct.” After reading the Standards of Business Conduct for the Walt Disney Company, on the first page there is a section, (Iger, 2012), calls “Speak Up.” This is where a website and phone number can help any cast member or employee call or report any unethical behavior they may have witnessed. In this...