Can the endangered public company survive? Should it survive? Evaluate the challenges
that for-profit public companies face from recurrent scandals, political attacks and
alternative corporate structures such as the B-corp. Can public companies survive? Should
they survive?
Some say that the notion of business ethics is an oxymoron because ethics in business is a
contradiction. In the capitalist corporate environment, business is driven by the need for
success. Success by any and all means necessary leaves the door open to unscrupulous
behavior. This means that in order to survive, public companies often operates in a manner
that is legal according to the law, but may be considered immoral and unethical by some
people. Since the early 2000’s, for –profit public companies have faced with different
challenges from scandals and political attacks to alternative corporate structures such as
private equity firms. Enron during 2001, MCI WorldCom during 2002, and Lehman
Brothers during 2008 each had accounting and financial misconduct by executives that led
to their demise. These misconducts included complex methods for misusing or
misdirecting funds, overstating revenues, understating expenses, overstating the value of
corporate assets or underreporting the existence of liabilities, sometimes with the
cooperation of officials in other corporations or affiliates. The public miscues of these
companies placed them on the endangered list and gave rise to private equity firms.
By 2002, formerly too big to fail companies like Enron, MCI WorldCom, Lehman
Brothers and others, were discovered to have been little more than a convolution of
paperwork masking minimal true assets and insurmountable liabilities of the firms.
