In terms of case studies, i'll post a few here over the next couple of days. Bare with me while I type them up.
James Hardy
James Hardy is a materials manufacturer, who from the 1930's to 1980's made fibro. They knew since the 1950's that this substance was dangerous to humans, and despite one third of all homes built between these periods being made using fibro did nothing to disclose such information.
As such, the company has now realised an extraordinary amount of contingent liabilities (use that exact term) in the form of potential litigation against it.
Essentially, the company realising this has acted unethically in trying to avoid these massive massive potential liabilities. Its unethical practices include:
1. Transfering its head office operations to the netherlands which has no corporate governance treaty with australia essentially trying to avoid possible litigation against it.
2. Asset stripped (i assume you all know this term) its australia arms leaving them effectively as empty shell companies that have all these liabilities hanging over them but no assets to meet the needs for victims.
3. They setup a special fund after they were caught making these moves. However they only put a few hundred million dollars into the fund, no where near the 1.9billion needed to actually cover victims.
They've acted unethically, and one way we can see that is by the applicaiton of the sun-light test, basically this test says. If the actions of a firm are publised would the firm like there imagine. Obviously in this case they would not.
These unethical practises have led to potential boycotts of james hardy products and a concerted effort on the part of the NSW government to bring james hardy to justice.
James hardy tried to avoid its contingent liabilities because it would prove to be a negative for their shareholder value. Essentially putting profit before peoples welfare.
