CASE STUDY 1
ESIC MYSTERIOUS TERMINATIO
Earnestwo Salvador Insurance Corporation (ESIC) was, by all accounts, a model insurance company.
Profits were strong and had been for several years in a row. The company carried the highest ratings in
its industry, and it had recently been voted one of the Top 100 companies to work in the Philippines in
recognition of its “very employee-focused work environment”. ESIC offers very generous benefits: free
lunches in the cafeterias, on-site daycare facilities, and even free Starbucks Coffee in the employee
break rooms. In an industry that was still struggling with massive claims after a succession of typhoons
and floods in the Philippines, ESIC was financially stable and positioned to become one of the major
insurance companies in the country.
So, why were the CEO, Caleb Briones, the CFO, Shiela Chua; and the COO, Hideo Valdez, all fired on the
same day with no explanation other than that the terminations were related to issues of conduct?
QUESTIONS:
1. Who would most likely have intervened to terminate the senior team over issues of conduct?
In corporate governance and structure, It is the board of directors who have the right and
responsibilities to protect shareholders’ interests, establishing policies for management and
make important decisions for the corporation. In this case, the board of directors are most likely
have intervened to terminate the senior team, especially the CEO over issues of conduct.
2. Give some examples of the kind of ethical misconduct that could have led to the termination of
the entire senior leadership of ESIC.
Possible reason or ethical misconduct that could have led to the termination of these senior
leaders would be their collaboration in activities and portraying better health to the public even
when their corporation is doing poor.
3. Was it a good idea to fire them all at the same time with no detailed explanation?
4.
How are the stakeholders of ESIC likely to react to this news? Explain.