RT Article
T1 Inside Agency: The Rise and Fall of Nortel
JF Journal of business ethics
VO 84
IS 2
SP 165
OP 187
A1 Fogarty, Timothy
A1 Magnan, Michel L.
A1 Markarian, Garen
A1 Bohdjalian, Serge
A2 Magnan, Michel L.
A2 Markarian, Garen
A2 Bohdjalian, Serge
LA English
YR 2009
UL https://ixtheo.de/Record/1785670964
AB By employing the theoretical template provided by agency theory, this article contributes a detailed clinical analysis of a large multinational Canada-headquartered telecommunications company, Nortel. Our analysis reveals a twenty-first century norm of usual suspects: a CEO whose compensation is well above those of his peers, a dysfunctional board of directors, acts of income smoothing to preserve the confidence of volatile investors, and revelations of financial irregularities followed by a downfall. In many ways, the spectacular rise and – sudden – fall of Nortel illustrates excesses of actors within, and contradictions of the system of corporate governance implied by the agency model. Furthermore, this case illustrates limitations of the agency framework in complex situations with short-term oriented investors.
K1 stock options
K1 income smoothing
K1 Financial misstatement
K1 Executive Compensation
K1 Agency Theory
DO 10.1007/s10551-008-9680-9