Name: Rheena B.

Delos Santos
Course & Yr.: BSBA-FM 1A
Subject: MGT4-C

MODULE I

I. LEARNING ACTIVITIES

Activity 1. On the space provided write A. for stakeholders; B. for agency issues
and problems C for attributes of corporation; D for responsibility of CFO/CEO

A 1. public
D 2. implement internal control
A 3. employees
B 4. conflict of interest
B 5. managerial opportunism
D 6. develop relations with financing sources
D 7. advisor to management
B 8. managerial defensiveness
A 9. management
D 10. audit

Activity 2

Locate the website of the World Council for Corporate Governance and work on
the following:

1. What are the mission, vision and objectives of the WCFCG?

MISSION
The World Council for Corporate Governance aims to help improve the quality of
corporate governance practices worldwide by promoting greater transparency, probity,
accountability, integrity and responsibility.

VISION
It aims to achieve it’s vision through a four-pronged action plan called IDEA:
 Interaction – Broaden the interaction among all stakeholders
involved in corporate governance process.
 Dialogue – Identify specific needs of developing and transition
economies and use the power of dialogue to build a consensus
and create partnerships among all stakeholders specially public
and private sectors and capital providers with a view to adopting
best corporate governance practices.
 Exchange – Exchange information, experience and knowledge
about best practices in corporate governance worldwide through
conferences, seminars, workshops and roundtables.
  Action – provides hands-on technical support to help developing
and transition economies to bridge the gap between them and
developed countries.

OBJECTIVE
The WCFCG's objective is to concentrates on the betterment and Improvement
on how the corporate governance is practiced nowadays.

2. What was the 2005 London Declaration?

The 2005 London Declaration is about “Patients for patient safety” also
known as the Word Health Organizations (WHO) World Alliance for Patient Safety.
They are gathered in London for 3 days from November 27-30, 2005 to form an
alliance to help reduce the massive burden of avoidable harm in health care and will
be the voice of all patients, especially those who are now unheard. During the
London declaration they pledge to help create a world in which health care errors
harm fewer people. They have also stated that there is a right to safe health care and
will not let the current culture of error and denial continue so they are calling for
honesty, openness and transparency. They are committed to spread the words to
everyone even from the country to country and will make the reduction of health-care
errors a basic human right that protects human life around the world.

3. Explain the acronym PREEMPTIVE:

PARTICIPATION
RESPONSIBILITY
EQUITY
ETHICS
MAXIMIZE CORPORATE VALUE
PERFORMANCE
TRANSPARENCY
INDEPENDENCE OF THE BOARD
VARIETY IMPROVES THE CROP
EDUCATION & TRAINING

II. ASSIGNMENT

Mini –Case
Mysterious Terminations

Multi Global Finance and Insurance Corporation (MGFIC) was, by all accounts, a model
insurance company. Profits were strong and had been for several years in a row. The
company carried the highest ratings in its industry and it had been recently voted one of
the top 100 companies to work for in the Philippines in recognition of its “very employee-
focused work environment”. MGFIC offers very generous benefits: free lunches in the
cafeteria, on-site daycare facilities and even free Starbucks Coffee in the employee
break rooms. In an industry that was still struggling with the massive claims after a
succession of typhoons and floods in the Philippines, MGFIC was financially stable and
positioned to become one of the major insurance companies in the country.
So, why were the CEO, Juan Paredes; the CFO, Lydia Sanchez and the COO, Jose
Aquino all fired on the same day with no explanation other than that the terminations
were related to issues of conduct?

Questions:

1. Who would most likely have intervened to terminate the senior team over
issues of conduct?
The Board of Directors would the governing the group of the organization
and have the authority to fire these executives

2. Give some examples of the kind of ethical misconduct that could have led
to the termination of the entire senior leadership of MGFIC?
Some examples of the kind of ethical misconduct would be the
collaboration of these executives in practices such as when company is
performing poorly while still portraying great health to the public.

3. Was it a good idea to fire them all at the same time with no detailed
explanation?
If each of these executives were involved in the same unethical conduct
then firing of them all on the same time is justified. However, the public has a
right to know, especially shareholders of the misconduct that was committed.

4. How are stakeholders of MGFIC likely to react to this news? Explain.

The stakeholders are most likely to be concerned and confused as to what
misconduct was committed by the three executives. The firing of these three
important executives will create another struggle for the organization because
they must replace these people and get them up to date on the operation and
issues.
Name: Rheena B. Delos Santos
Course & Yr.: BSBA-FM 1A
Subject: MGT4-C

MODULE II
I. LEARNING ACTIVITIES

1. On the internet make research on how certain corporations have been influenced
by the government and different pressure groups in terms of their corporate
policy.
The government influences certain corporations by controlling the economy and
change how companies operate by implementing policies or modifying its own spending
and taxation. Just like for example governments can enacts regulation or laws to protect
the consumers and employees as well as to limit where corporations can expand. There
are times that the corporation or business are influenced by the government in response
to societal challenges and in boosting the country’s economy. The government’s role in
the industry is creating a stable market. Pressure groups are non-governmental
organization that seek to control political and even other decision-making process. They
influence certain corporation by example lobbying Board of Directors wherein they
persuade the firm of their social responsibilities and even boycott particular firms or
products.

2. Explain why the marriage of science and technology has a serious implication
and must not be given “blank check” otherwise it can do limitless things.
Science, technology, and innovation are all subcategories of larger category of
activities that are strongly interconnected but separate. They both complement each
other wherein Science contributes to technology and likewise with technology
contributing to science. A more common example of direct tie between science and
technology occurs when a new subject of study is purposefully explored with the
general expectation that it will lead to valuable applications, despite the lack of a
specific end-product in mind.
The marriage of science and technology has a serious implication that is not right
to give it a blank check or unlimited freedom in what it should do. There are times that
people are so dependent to technology that they are sometimes procrastinate and
become lazy. The creation of the nuclear bomb and atomic bomb is the most significant
or serious impact of science and technology. Nuclear power plants have made a huge
contribution, notably in terms of energy output, but they are also exploited by terrorists
or other countries to produce bomb that kill not only people but the planet as well.
The use of science and technology must not be given an unlimited freedom
because of what the computer can do with access to the human mind, the idea of
uploading a consciousness into a computer isn’t frightening. It’s terrifying to consider
what a human mind could accomplish if it had access to limitless resources and data. It
stems from a deep apprehension about our own human nature, and it makes us wonder
how such power could be against us.
II. ASSIGNMENT

Mini-Case
Political Pyramid

Organizations provide a power base for individuals. From a purely economic standpoint,
organizations exist to create an excess of income over expenses by meeting needs in
the marketplace. But organizations are also political structures which provide
opportunities for people to develop careers and therefore provide platforms for the
expression of individual interests and motives. The development of careers, particularly
at high managerial and professional levels, depend on accumulation of power as the
vehicle for transforming individual interests into activities which influence other people.

A political pyramid exists when people compete for power in an economy of scarcity. In
other words, people cannot get the power they want just for the asking, instead they
must enter into decisions on how to distribute authority in a particular formal organization
structure.

1. Make a research on how and in what instances can individuals gain power within
organization?
A political pyramid is said to reliable when people contest for power in an
economy of scarcity power. Individuals gain power within the organizations under the
following instances; When the organizations exist to generate excess income over
expenses and meet the marketplace's needs, also, individuals gain power when political
structures provide opportunities for people to develop careers, thereby providing
platforms for expressing individual interests and motives. Besides, individuals
accumulate power when they build their careers, particularly at high managerial and
professional levels. Again, by entering into decisions on how to distribute authority in a
particular formal organization.

2. Comment on the ethics of “gaining comparatively at someone’s else’s experience.

The morals of gaining comparatively at someone else’s expense results in a
relative alteration in power distribution, therefore regulating the scarcity of power in an
organization.
Name: Rheena B. Delos Santos
Course & Yr.: BSBA-FM 1A
Subject: MGT4-C

MODULE III
I. LEARNING ACTIVITIES

Activity 1.

Manila, Philippines Philippine Long Distance Telephone Co. has confirmed rumors that it
will acquire a majority stake in Digitel Telecommunications Philippines Inc. operator of mobile
network Sun Cellular, from the Gokongwei family. The PLDT group, which already operates three
mobile brands Smart, Talk N’ Text and Red Mobile will gain an extra 15 million subscribers with the
acquisition for a total of about 60 million users. This will give it a commanding lead in the telecom
sector, with seven out of every 10 mobile subscribers being in the PLDT network. Its next biggest
rival, Globe Telecom, has just over 23 million subscribers. “through this initiative alters the country’s
telecom landscape, we expect competition within the industry to remain very robust given that other
operators, including new entrants are formidable and well-funded” PLDT chairman Manuel
Pangilinan said in a statement.
PLDT will issue 69.2 billion worth of new shares, at 2,500 each, as a form of payment for
the 51.5% stake in Digitel to Gokongwei holding firm JG Summit Holdings. Digital is also expected
to conduct a tender offer for the 48% of Digitel shares still held by minority stockholders at 1.60 per
share, this exercise will bring acquisition cost to 74.1 billion.

1) What are implications of PLDT move to acquire digitel?

The acquisition of digitel by PLDT guaranteed customers better services resulting
from combined expertized, resources, and technological capabilities between digitel and
PLDT group. In addition, the acquisition makes PLDT a major player in the domestic
mobile network industry by increasing its market share. With PLDT’s successful
acquisition of digitel, consumers are expected to begin realizing the substantial benefits
to be reaped from the combined expertise, resources and capabilities of the PLDT group
and Digitel.

2) Elaborate on at least two effects of Gokongwei’s failure in its bid of PLDT?

 The Gokongwei have found themselves at the receiving and criticisms being
hurled by the PLDT camp, which is questioning the legality of the deaf entered in
between John Gokongwei’s and Salim Group last June 4.

 John Gokongwei’s said he is flattered by reports that some of the county’s

biggest name in Philippines business, including the ayala group, metrobank
 group, and the SM Group of Henry SY will band together to present a better offer
for PLDT and BLC than the existing deal.

ASSIGNMENT:

1) If the shareholder’s position is not protected by a contract – unlike the provider of

debt how is it in fact made by viable? Discuss.
Shareholders are individuals (or businesses) who have invested time or money in
a company in exchange for shares (equity). Shares may have a variety of rights attached
to them; for example, some shares have voting rights and others do not have; however;
where voting shares involved, it is critical to ensure that the relationship between the
shareholders is registered.
The Companies Acts and the Articles of Association of a company impose
stringent compliance requirements on shareholders. A shareholders’ agreement is
private contract between a company’s owners that governs how the shareholders can
collaborate. A shareholders’ agreement should address both legal and practical
concerns, including the following:
 Shareholders’ rights and responsibilities
 Making important decisions, such as hiring key employees or entering into key
financial agreements, are all part of running a company.
 Selling existing shares and issuing new shares
 Dealing with disputes
 Conflicts of interest
 Offering clear protection to minority shareholders
Name: Rheena B. Delos Santos
Course & Yr.: BSBA-FM 1A
Subject: MGT4-C

MODULE IV
I. LEARNING ACTIVITIES

Enumeration.

1 to 4: The four (4) key players in the Japanese model of corporate governance.
5 to 8: Key players in the Japanese model of corporate governance that are not key
players under the Anglo-US model of governance.
9 to 10: Give at least 2 routine corporate actions that requires shareholder’s approval
under the Anglo-US model of corporate governance.
11 to 14: Examples of abuses when the same person is the chairman of the board and
the chief executive officer.
15 to 16 The two boards prescribed under the German model of corporate governance.

ANSWERS:
1-4
 MAIN BANK
 AFFILIATED COMPANY
 MANAGEMENT
 GOVERNMENT

5-8
 DIRECTORS
 SHAREHOLDERS
 SELF-REGULATORY ORGANIZATIONS
 CONSULTING FIRMS

9-10
 ELECTION OF DIRECTORS
 APPOINTMENT OF AUDITORS

11-14
 CONCENTRATION OF POWER IN THE HANDS OF ONE-PERSON
 CONCENTRATION OF POWER IN A SMALL GROUP OF PERSONS
  MANAGEMENT ATTEMOT TO RETAIN POWER OVER A LONG PERIOD OF
TIME W/O REGARD OF OTHER PLAYERS
 THE BOARD OF DIRECTORS’ FRAGRANT DISREGARD FOR THE INTEREST
OF OUTSIDE SHAREHOLDERS

15-16
 MANAGEMENT BOARD
 SUPERVISORY BOARD

ASSIGNMENT:

1) Explain how a Ponzi scheme works?

An investment fraud that pays existing investors with funds collected from new
investors. Ponzi scheme organizers often promise to invest your money and generate
high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not
invest money. Instead, they use it to pay those who invested earlier and may keep some
for themselves.

2) In the case of the Philippines, do you consider the Bequest Bank and AG Share
cases as the same as Ponzi Scheme? Why or why not?
Yes, because they may have done a clever and dishonest act to persuade
investors, to have their money by using lies and tricks which resulted to shut down of
their operations by the BSP for being insolvent and engaging in unsound practices.

3) Is the strategy adopted by Mr. Julian B. Damondong similar with that of Charles
Ponzi? Why or why not?
Julian Damondong also use similar method of schemes that Ponzi. It is also about
financial scandal scheme like what Ponzi did, he used the investor’s money that are
being utilized for their business and guarantee to return into higher sum. He is distinctive
in a manner on how to persuade somebody to put resources into their business and how
to put cash like Ponzi’s plan to guarantee to return as high as 520% for them to
successfully lure more investors in their scheme.

4) In the case of the Ample Group, what are the manipulations adopted by Mr. Marko
Ripot to persuade investors to put in money to the business?
Mr. Marko Ripot adopted these manipulations to persuade investors to put
money to the business. These are: Obtaining shares in Ample Group without disclosing
it to the exchange. Conspiring at least eight stock broking firms to fake transactions and
thus inflate volumes in Ample Group shares. Insider trading or the illegal practice of
trading on the stock exchange to one’s advantage through having access to confidential
information.

5) Which schemes served as a platform for perpetrating both the Ample Group and
the Bequest Bank fiascos?
The scheme that served as a platform for both the Ample Group and Bequest
Bank is the Ponzi scheme because they have the same way of luring the investors.

6) Did the Board of both corporation’s act in the interest of their shareholders and
the public in general?
 No, instead they acted for their self-interest. The shareholder’s and the public
have been deceived by the board of both corporations by saying that it will grow for their
business more and get will higher profits but in reality the Board of Directors are doing it
for their own personal gain.

7) In assessing the structure of both companies, are these companies in

consonance with the corporate governance principles as presented in the three
models?
No. Since both Ample Group and Bequest Bank suffered from different form of financial
scandal, their structure will never be in consonance with the corporate governance
principles presented in the three model because just in the regulatory framework, theirs
is already illegal, which in the corporate governance structure must be legal. And also
the persons composing these corporations do the give the sound, integrated and a
quality information to the public hence, they scammed people out of billions of money for
their personal gain which is a clear fact not a structure or characteristic of a good
corporate governance.

8) The SEC plays an important role in policing the corporations. In what way is SEC
remiss in these two cases? Elaborate.
The SEC is responsible for regulating the securities industry in the Philippines. Also, the
SEC maintains the country’s company register which lists all organizations registered in
specific jurisdiction. They could have been stricter in implementing other regulations and
have every business monitored and evaluated from time to time.
Name: Rheena B. Delos Santos
Course & Yr.: BSBA-FM 1A
Subject: MGT4-C

MODULE V

I. LEARNING ACTIVITIES

Internet Exercise

1. Locate the website for Business for Social Responsibility. What is the stated mission
of the BSR? What does the BSR do? List four benefits of what BSR claims corporations
can achieve through CSR programs. List four well-known companies that are members
of BSR?
The mission of BSR is work with business to create a just and sustainable world. We
envision a world in which everyone can lead a prosperous and dignified life within the
boundaries of the Earth’s natural resources.

The role of business is to create and deliver products and services in a way that treats
people fairly, meets individuals’ needs and aspirations within the boundaries of our planet, and
encourages market and policy frameworks that enable a sustainable future. To catalyze change
within business by integrating sustainability into strategy and operations, and to promote
collaboration among companies and their stakeholders for systematic progress toward a just
and sustainable world is a role of BSR.

The following are the benefits of what BSR claims corporation can achieve through CSR
programs:
 Tangible external benefits such as CSR audits, retention orders, and increases in
orders or in price.
 Integral intangible benefits such as cost reduction, productivity gains.
 External intangible benefits such as recognition of excellence and improved
relationships with stakeholders

The following are the well-known companies that are member of BSR:
 Facebook, Inc.
 McDonald’s Corporation
 Google, Inc.
 Microsoft Corporation
2. Locate the website for Ideals Work. What is the goal of the Ideals Work organization?
What services does the organization offer? How does the mission of the BSR differ from
that Ideals Work?
The goal of Ideals Work organization is to empower individuals and organizations to
align their actions with their values.
The Ideals Work provides environmental, social, and governance research, consulting,
and portfolio management solutions to asset management firms, managed account sponsors,
institutional investors, plan investors, and investment advisers. It offers research workstation,
portfolio management tool, client research integration, investment compliance reporting, custom
research, private label, and training and support solutions. The company also provides
research, analysis, and certification services to corporation, public pension systems,
government agencies, policy organizations, and professional research enterprises. Its services
enable customers to identify and manage security risk-related concerns.

In BSR is to work with business to create a just and sustainable world. We envision a
world in which everyone can lead a prosperous and dignified life within the boundaries of the
Earth’s natural resources while the Ideals Work provides environmental, social, and governance
research, consulting, and portfolio management solutions to asset management firms, managed
account sponsors, institutional investors, plan investors, and investment advisers.

3. Locate the website for the corporation social responsibility news wire CSR Wire. What
does CSR Wire do? List four members and explain the services that receive from CSR
Wire. Find the CSR events page and identify the next scheduled event. Briefly summarize
the location and planned agenda for the event. If the event has a website. Visit the site
and record the name of the keynote speakers.
CSRwire is a digital media platform for the latest news, views and reports in corporate
social responsibility (CSR) and sustainability. CSRwire has helped to paved the way for new
standards of corporate citizenship, earning the international respect of the thought leaders,
business leaders, academics, researchers, activists and the media. The CSRwire team works
on a wide range of traditional and social media services and solutions to support its members’
marketing and communication strategies.

Four members:
 Western Union – A leader in global payment services, believes access to
financial services is a necessity. Western Union moves money reliably and
quickly to almost every country - and we do it for extraordinary people seeking a
better life and for businesses that generate jobs and opportunity.

 Sustainable Brands – Is the premier global community of brand innovations

who are shaping the future of commerce worldwide. Since 2006, or mission has
been to inspire, engage and equip today’s business and brand innovators to
prosper for the near and long term by leading the way to a better future. Digitally
published news articles and issues-focused conversation topics, internationally-
known conferences and regional events, a robust e-learning library and peer-to-
peer membership groups all facilitate community engagement throughout the
year.

 Bioneers – Promotes practical environmental solutions and innovative social

strategies for restoring Earth’s imperiled ecosystems and healing our human
communities.
  Ceres – A national network of investors, environmental organizations and other
public interest groups working with the companies and investors to address
sustainability challenges such as global climate change.

Schedule of the Events

Mini Case
Banning the Real Thing

1. Which ethical standards are being violated here?

The ethical standard that being violated here is not having good enough
practices in the company and the unethical labor practices. The ethical standards that being
violated are the use of solid waste disposal, overuse of pesticides in India and lack of
sufficient irrigation water. They act unethical in regards to the compliance which lead to
negative result of the company.

2. Is the University being unreasonable in the high standards demanded in its Vendor
Code of Conduct?
No, because health is the main reason why they implemented this code of
conduct, they are just being careful to any negative effect that might happen to their
students as they do further investigation about the product and it come up with negative
effects. They just do a thing for the sake of the safety and health of the people around them.

3. Do you think the University would have developed the vendor code of conduct
without the aggressive campaign put forward by sole?
No, because if they will not resort in aggressiveness of their campaign it will not
be effective and most of their vendor will not obey the code of conduct.
4. How should Coca-Cola respond in order to keep university of Michigan contracts?
The Coca-Cola should address all the companies that Michigan University submit
to SOLE. They must respond accordingly based on how the problem should resolved,
especially to the chemical contents seen in their products. Since the university in very
sensible in terms of that matter they must make a way to prove that those contents are not
visible to their products. In addition, Coca-Cola needs to be more transparent, collaborative
with independent investigator and NGO Agencies and also corrective plan.
5. How would you relate the situation in the local environment?
The local government sometimes didn’t think about the effects of their
businesses to the environment and sometimes they have unethical labor practices because
they value gaining profits than thinking the health of their employees and the environment.
For example, some of the local government have poor facilities or offers products/services
to hoard funds that they gain through the taxes of the people or in other words, they corrupt
the money of the people for their own benefit.