Ethical and Corporate Governance Issues in Multinational Companies

Abstract

The events that caused Parmalat, a multinational conglomerate, to commit a big accounting fraud and go bankrupt are discussed in this case report from the perspectives of ethics and corporate governance. The report also discusses the steps that multinational corporations should take to ensure ethical practices and solid governance structures and processes to lessen their exposure to the repercussions that other corporations that have collapsed, with a specific focus on Parmalat, have experienced. It emphasises how Parmalat's failure was ultimately caused by a poor and inadequate corporate governance system that also contributed to other issues, leading to its demise. Following this, the first section outlines the scandal facts, including what fraudulent acts occurred, who committed them, the scandal's impact, and the measures taken to resolve the problems. The second section discusses the key theoretical ideas that explain why the scandal occurred, and the final section provides an overview of the major issues, implications, and suggestions.