Reference no: EM133145907

Question - In August 2021, Mil Santos, Dell Inc.'s CEO and chairman of the board, was reelected to Bell's board of directors by Bell's shareholders. However, not all of the shareholders were happy with Mr. Santos reappointment. Specifically, two labor groups that own shares of Bell stock wanted Mr. Santos removed from the board because of a Securities and Exchange Commission (SEC) action and settlement involving the company and Mr. Santos.

The SEC complaint alleged various accounting manipulations that called into question Bell's reported financial success from 20X0 to 20X2. In July 20X5, Bell, Inc. agreed to pay P100 million to settle SEC charges, without admitting or denying guilt. Mr. Santos agreed to pay a P4 million fine, also without admitting or denying guilt. Consider the principles of effective corporate governance presented in this chapter and answer the following questions.

a. What principles of corporate governance appear to have been missing at Bell?

b. Given the apparent actions of Mr. Santos, along with his management and board roles, should Bell's external auditor expect the corporate governance at Bell to be effective?