Question

Find the Corruption Perceptions Index (CPI) score for two countries where your selected company does business, one country with a relatively high score and one country with a relatively low score. Search for news stories about corporate financial scandals in these two countries. Prepare a short summary of news stories about financial scandals in these countries. Briefly describe what you perceive are the risks of corruption, such as paying bribes, that your selected company might face in these countries.

Notes: The three countries to choose from are the US, Canada, and Spain.

Answer 1

We will take the examples of US and Canada here.

Corruption Perceptions Index (CPI) score for two countries where your selected company does business is as follows :

- US Rank in the Index 2019 Rank = 23/ 180 , Score 69/100

- Canada Rank in the Index 2019 Rank = 12/ 180 , Score 77/100

Canada  

- Nortel Company This company was engaged in the Telecommunication business . The issue in this case was the higher pay paid to the executives of the company following the financial crisis of 2008.

US

- Dynegy Corporation – This company had wrongdoings in the terms of the issues in the one subsidiary purchasing another parent company of the group. This company ultimately filed for bankruptcy

- Bernard L. Madoff Investment – This company was like a ponzi investments and cheated million of people with appx 65 billion dollar. In this people were paid from the money collected from new members there were no profits in the company

- Washingtom Mutual – This company became victim of the financial crisis due to subprime issues in 2008

- AIG / Lehman Brothers, Bear Sterns, - This company became victim of the financial crisis due to subprime issues in 2008 due to corporate governance issues and mis management and over leverage.

  

These companies were subject to regulatory scrutiny many companies have paid heavy fines and many have gone for bankruptcies. Also new laws have been introduced following financial crisis of 2008.