Reference no: EM132540403

In late 2010, 29 miners died when they were trapped 1.5 kilometers underground by a methane explosion inside a coal mine in Pike River, New Zealand.

A Report into the incident stated:

• The lessons from the Pike River tragedy must not be forgotten ... That would be the best way to show respect for the 29 men who never returned home on 19 November 2010, and for their loved ones who continue to suffer ...
• Protecting the health and safety of workers is not a peripheral business activity. It is part and parcel of an organization's functions and should be embedded in an organization's strategies, policies and operations.

This requires effective corporate governance. Governance failures have contributed to many tragedies, including Pike River ...

• The board and directors are best placed to ensure that a company effectively managers health and safety. They should provide the necessary leadership and are responsible for the major decisions that most influence health and safety: the strategic decision, securing and allocating resources and ensuring the company has appropriate people, systems and equipment.
• Source: Royal Commission on the Pike River Coal Mine Tragedy 2012, Report of the Royal Commission on the Pike River Coal Mine Tragedy, vol. 1, p. 3; part 2, p. 324, accessed October 2016.

Parts:

Question 1. The above scenario demonstrates poor standards of behavior visible in boards of even apparently reputable corporations operating in countries reputedly with the best legal systems. Discuss 2 ethical obligations of employer governance towards its employees.

Question 2. Employers who do not meet needs of their employees appropriately, and who bypass or ignore fundamental principles and/or laws, have seen to suffer serious adverse consequences through bad publicity and the loss of reputation. Explain why those charged with corporate governance need to be mindful of these factors?

Question 3. Discuss 1 ethical failure that may have led to the problems in the first place.