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Cengage Advantage Books: Foundations of the Legal Environment of Business 2nd Edition by Marianne Jennings, Albert Napier, Marianne Jennings
Edition 2ISBN: 978-1133709947Cengage Advantage Books: Foundations of the Legal Environment of Business 2nd Edition by Marianne Jennings, Albert Napier, Marianne Jennings
Edition 2ISBN: 978-1133709947 Exercise 12
The Director Who Demanded More
In November 2010, after having served the company for eight years, former Procter Gamble CEO Durk Jager resigned from the board of directors at Chiquita Brands International, Inc., and sent the following e-mail to his fellow directors3:
Dear Independent Directors:
This is to confirm that I have resigned from the Board of Directors of Chiquita Brands International, effective immediately. The Company faces declining revenues, deteriorating profits, and a severe drop in its stock price. I have lost the confidence that we have the strategies and plans that can reverse this situation. Chiquita also lacks the capabilities to address basic operational requirements for a sound business.
The fact that Management did not want or could not respond to a request for a realistic 2011 forecast six weeks prior to the start of the new fiscal year is simply one such illustration.
I have enjoyed interacting with each of you, and have the greatest respect for your dedication to the interest of Chiquita and its stakeholders.
Why is quitting sometimes the ethical thing to do? What message did Mr. Jager send to the shareholders through his actions? Mr. Jager was paid $175,000 in cash and stock grants during 2009 for his service as a director. Is it more difficult to quit when you have lost compensation as a result?
In November 2010, after having served the company for eight years, former Procter Gamble CEO Durk Jager resigned from the board of directors at Chiquita Brands International, Inc., and sent the following e-mail to his fellow directors3:
Dear Independent Directors:
This is to confirm that I have resigned from the Board of Directors of Chiquita Brands International, effective immediately. The Company faces declining revenues, deteriorating profits, and a severe drop in its stock price. I have lost the confidence that we have the strategies and plans that can reverse this situation. Chiquita also lacks the capabilities to address basic operational requirements for a sound business.
The fact that Management did not want or could not respond to a request for a realistic 2011 forecast six weeks prior to the start of the new fiscal year is simply one such illustration.
I have enjoyed interacting with each of you, and have the greatest respect for your dedication to the interest of Chiquita and its stakeholders.
Why is quitting sometimes the ethical thing to do? What message did Mr. Jager send to the shareholders through his actions? Mr. Jager was paid $175,000 in cash and stock grants during 2009 for his service as a director. Is it more difficult to quit when you have lost compensation as a result?
Explanation
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Individuals must take ethical decisions ...
Cengage Advantage Books: Foundations of the Legal Environment of Business 2nd Edition by Marianne Jennings, Albert Napier, Marianne Jennings
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