Review the information provided below in the link on “Federal Sentencing Guidelines and B Corporations,” in order to have a firm understanding of how:
Fines are determined by the court system
Compliance and ethics programs mitigate penalties
Organizations with past “criminal activity” are fined differently
Since their creation in 1991, the Guidelines have undergone some revision. Significantly, revisions were made following the wave of ethics scandals in the first part of the century (including Enron). Enron’s bankruptcy filing has received a great deal of review, but David, McWhorter, and Fort (2006) provide a decent summary in The 2004 Amendments to the Federal Sentencing Guidelines (linked below):
The 2004 Amendments to the Federal Sentencing Guidelines.
The culture created at Enron in the late nineties encouraged unethical behavior and limited employees ability to question illegal practices, so to what extent is the company liable? The Federal Sentencing Guidelines were in place to respond to this question. Enron had a code of ethics in place.
In 2004, Charlie Rose interviewed the authors of “The Smartest Guys in the Room.” During the interview, some of the complexities of the criminal case against the leadership at Enron are described.
1. Given what you know of the Federal Sentencing Guidelines and how they are applied to encourage ethical behaviors within organizations, have the revisions made in 2004 been successful in discouraging fraud and protecting stakeholders?
2. Find a recent case in which Federal Sentencing Guidelines were used within the past two years. Identify how they were used in the case, and what happened as a result of the case.
