Ethical Leadership Challenges

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Scenario ? Ethical Leadership Challenges at Diamond FoodsDiamond Foods, a nut and snack company, was founded in 1912 by a group of cooperative walnut growers, known as “Diamond of California.” Over the years, Diamond Foods grew mostly by acquiring other brands, including Pop Secret, Kettle Foods, and Harmony Foods. It also introduced another line of snack nut products under its Emerald Brand. Today the company is owned by Snyder’ s —Lance, Inc. and is headquartered in Charlotte, North Carolina. Snyder’ s—Lance, Inc. purchased the company for $1.91 billion in a cash—and—stock deal after an SEC investigation. In addition to Diamond, the Snyder’ s —Lance, Inc. product line includes the brands Cape Cod, Lance, Tom’ s, Eat—Smart, Stella D’ ora, Kruncherst, Late July, Archway, Oke—Doke, Pretzel Chips, and Jay’ s. There are currently 6,400 full—time employees and numerous notable competitors such as Kellogg, U.SA., Frito—Lay, USA Inc., and Mondeleze International, Inc. Brian Driscoll was named President and CEO of Snyder’ s—Lance, Inc. in June 2017. He had previously been President and CEO of Diamond Foods, a position he assumed after its former President and CFO were let go due to the scandal at Diamond in which financial reports were falsified. The scandal originated in 2005 under the management of the preceding President and CEO, Michael Mendes. His business philosophy was “Bigger is Better,” which ultimately led to a corporate culture of poor judgment and fraud. As part of his growth strategy, he secured millions in loans to finance the acquisition of Pop Secret. He later attempted to purchase Pringles from Proctor and Gamble. Had the merger been successful, Diamond Foods would have been the second largest distributor of snack foods in the United States following PepsiCo. In 2011, Mark Roberts, an analyst with the Off—Wall Street Consulting Group, raised questions about Diamond’ s accounting practices. He accused Diamond of incorrectly reporting its payment to suppliers. Diamond would pay growers in September for walnuts that were delivered in Diamond’ s fiscal year 2011 which had already ended in July. This significantly impacted Diamond’ s financial statements, which, if done intentionally, would be illegal. Initially

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