University of Minnesota business professor Norman Bowie says backdating is common.
"What I see here is a practice that has gone on in a lot of companies across the country. It clearly should not have been done," said Bowie. "What the McGuire UnitedHealth case shows -- and lots of cases across the country -- is that this practice will not be tolerated."
UnitedHealth was one of the first to come under the federal government's scrutiny for the practice.
Federal authorities are examining more than 100 companies to determine if stock options were backdated or otherwise treated favorably for executives.
Just in the past week, several companies' corporate leaders, including four CEOs, have left due to options backdating questions.
UnitedHealth's board of directors is implementing several measures to try to avoid future backdating problems and other lapses in ethical judgment.
What the McGuire UnitedHealth case shows -- and lots of cases across the country -- is that this practice will not be tolerated.University of Minnesota business professor Norman Bowie
The company says it'll bring in new independent directors over the next three years. UnitedHealth is also creating two new posts: Chief Legal Officer and Chief Ethics Officer. The ethics officer will communicate and monitor compliance with standards of ethical conduct and business integrity by all employees.
"All these measures look reasonable on their face. Let's see what the execution looks like. Corporate law has a bit of history of having measures that look nice on their face, where the execution is a bit problematic," according to University of Minnesota law professor Claire Hill. "It's nice to have an ethics officer. But what does the ethics officer do?"
Earlier this year, UnitedHealth announced other steps to address the stock options mess. They include establishing a public responsibility committee to focus on UnitedHealth Group's corporate social responsibility.
In addition, the company chose to require all members of the board's audit committee to be financial experts as defined by the Securities and Exchange Commission.
Dan Kleingberger, a professor at the William Mitchell College of Law says such steps are long overdue.
"These measures are not like they invented the wheel for the first time," Kleinberger says. "Most --if not all these things-- have been recommended as corporate good governance practice for years."
Kleinberger says shareholders may be a bit peeved.
"If I were a shareholder, I would be on one hand glad they're doing it. On the other hand, if I were knowledgeable, a bit irritated it took a scandal to prompt them to do it," Kleinberger says.
Lucinda Jesson, a law professor at Hamline University, expects UnitedHealth Group may add more safeguards in the future.
"The board has taken strong actions, based on what we know today," Jesson says. "But I don't think this will be the end of the story. There may be additional questions a lot of folks have. The independent investigators also found there were internal controls that hadn't worked. If they weren't working in regard to the stock option grants, were they not working in regard to anything else? That is a question many shareholders will want answered."
Other measures taken by UnitedHealth to try to head off future problems include discontinuing stock awards to some senior executives, including the CEO and President.
The company has also moved to eliminate management's authority to make stock awards.