In any company, those people who are connected to the company in some way, without owning shares, are considered its non-shareholders. Xlibris, a print-on-demand publication company based in Pennsylvania, is a medium-scale company that employs hundreds of employees. Its non-shareholder entities are: the employees, which are comprised of copy editors, artists, and sales representatives; and the authors who are their customers. Currently, Xlibris has closed some of its U. S. offices and relocated in countries where labor is cheaper.
As a publication company, Xlibris’ thrust is to provide authors with a way to get their books published and marketed. The employees and their families depend of the company as their source of living. Should Xlibris start losing customers, or if authors would go to other companies offering the same services due to ethical issues, then, the employees would also lose work. More importantly, Xlibris’ relocation of some of its processes outside the country was done to maximize value for shareholders.
In the process, however, some employees were hurt because they lost their jobs. The authors expect Xlibris to be ethical in their business dealings. They rely on the company’s honesty and integrity when their work are promised of getting published and marketed. The authors, after paying for the cost of self-publishing, expect Xlibris to keep its word regarding these two matters. Comment 1: To add to this answer, employees depend on Alternative Technology to be ethical not only in order to stay in business.
Also, by being ethical, the employees are assured of being treated fairly and equitably. Ethics is not entirely about creating jobs or helping suppliers stay in business. Ethics is more on doing what is morally right for the business, and maximizing value for shareholders without hurting its employees. Comment 2: It is admirable the way Scott Forge has set up a retirement program for its employees. This only implies that the company looks at its employees as partners rather than mere employees.
The company is probably small and is owned by a few individuals who show their appreciation for their employees loyalty by rewarding them with generous amount of stock. There is just one thing about the response on “other businesses as being a non-shareholder” constituents of a particular company. If this means the customers or suppliers, then, I would agree that they belong to the non-shareholder constituency, but if this mean other firms engaged in other form of trade, then, these entities can’t be considered non-shareholders.
2. Does this legislation affect ethical or legal behavior or both? Why? The Sarbanes-Oxley Act was crafted in response to the accounting scandal that hit Enron and Arthur Andersen in 2001. The Act was passed primarily as a response to the ethical issues that cropped up when these large corporations were discovered to have failed their fiduciary duties to their shareholders, employees and the public. Although the Act was founded on ethical matters, there are some parts of it that also covers legal behavior of public corporations.
Do you agree with the following statement: `If directors and officers of American corporations were ethical, we would not need legislation like the Sarbanes-Oxley Act`? Why, or why not? Yes, I agree to the statement. Sarbanes-Oxley was established to prevent fraud and to guide officers to choose the moral path in handling their businesses. If Enron’s or WorldCom’s executives chose to listen to the dictates of their conscience, then, the original entities would have been left standing, and their shareholders and non-shareholders wouldn’t have lost so much.