HIH Insurance The Failure In Corporate Governance Free Writing Sample

In the past few old ages, the prostration in big public listed companies has raised stakeholders concern about corporate administration, which is a prima issue country for concern worldwide. While legion definitions of the term corporate administration have been suggested, it is by and large defined as the model of procedures and constructions to command and pull off a corporation with the aim of heightening company and stockholder wealth, whereas at the same clip, protecting the involvements of other stakeholders.The failure of many corporations ensuing from a corporate administration job caused counterproductive results to stockholders and besides the wider community.

One of the most well-known concern fiascos, peculiarly in Australia, is HIH Insurance Limited ( HIH ) . As a consequence of over-optimistic ratings of assets and extended understatement of liabilities, many of HIH ‘s policyholders and its creditors encountered a significant loss. Bailouts can be Australian taxpayer over a billion-Australian dollar but it did non cover all.It is the fact that non merely the graduated table of the corporate failure is so immense but besides its consequence is widely, including the community and regulators.

The paper therefore is developed to discourse the HIH corporate administration failure in an facet of hazard direction. Both a civilization failure and mis-governance/mismanagement can be identified as cardinal hazard direction issues. The board of managers ( from here it will be referred to as the board ) and direction were unable to move as their ain functions and fundamentally on behalf of stockholders ‘ involvements.One of cardinal jobs is that HIH offered at excessively high monetary value for amalgamation and acquisition.

Besides, the company had non set aside adequate capital to cover its future liabilities. It can be argued that HIH ‘s board was subservient to senior direction ensuing to a hapless determination devising is critical factor of this crisis. Furthermore, the paper will use some theories and/or the other company ‘s crisis to compare and contrast with the HIH crisis.Ultimately, several lessons which are to better public presentation and to heighten answerability will be addressed to go on good corporate administration.

Business hazard direction is by and large a assortment of activities undertaken by a corporation to command and pull off possible inauspicious effects. On the other manus, the corporation may take such advantages by sing from chances which are comparative to those hazards. It therefore plays an of import function in a corporation to be go oning growing, enhances success every bit good as sustainability.As a consequence of its importance, this paper will excite all stakeholders particularly at the degree of senior direction and board of managers to be cognizant of hazards and besides to try to manage unsure fortunes by larning from a old instance viz.

, the HIH failure. A decennary ago, HIH was put into settlement stand foring one of the largest company collapses in the history of Australian. Many accusals, in peculiar concern analysts, have attributed questionable decision-making procedures as one of major factor to this crisis.This paper will analyze about causes of HIH failure and significant unfavourable effects involved in a corporate administration subject.

While there are assorted grounds ensuing in the HIH crisis, this paper will concentrate entirely on a concern hazard direction issue associated with the failure in corporate administration. To see the selected issues, which are a civilization job ( a hapless function theoretical account ) , and mis-governance/mismanagement ( an under-provision ) , expressed standards are that the badness of impact on fiscal public presentation and its range.The intent of this paper is to analyze the HIH corporate administration issue. The first subdivision will discourse the environing facts incorporating a company background.

The 2nd subdivision will measure hazard direction issues: in facets of an unqualified function theoretical account and a proviso shortage, in line with comparison and contrast with mention stuffs and other companies. After that, some effects of this crisis and its deductions will be addressed.Last, the erudite lessons and recommendations: paying more attending to put on the line direction, promoting more answerability, reconstituting the board every bit good as naming proper direction, heightening risk-based determination and puting intensive ordinances, will be stated in a decision subdivision. MW Payne Liability Agencies Pty Ltd.

was established in 1968 by integrating between RayA Williams and MichaelA Payne to subvention insurance concern in Australia as an bureau for Lloyd ‘s of London mobs ( Owen 2003a ) .The nucleus concern was to compose assorted types of accredited insurance consisting compulsory insurance ( such as workers ‘ compensation ) and non-compulsory insurance ( such as travel insurance ) ( Owen 2003a ) . Over the following two decennaries, the company expanded and diversified its insurance concern geographically in both Australia and overseas, and became an Australian listed company in 1992 ( Owen 2003a ) . At that clip, the CE Heath plc was a major stockholder with 44 per centum of entire equity ( Owen 2003a ) .

The company merged with the Swiss based insurance company Winterthur Insurance Company established ‘HIH-Winterthur ‘ ( later HIH Winterthur International Holdings Ltd. ) as the 2nd largest general insurance investment banker in the Australian market ( Owen 2003a ) . However, three old ages subsequently, Winterthur disposed of its HIH retention, which so continued as HIH Insurance Ltd. ( HIH ) ( Owen 2003a ) .

After Winterthur ‘s issue, HIH acquired FAI General Insurance Company Limited ( FAI ) and entered a joint venture relationship with Allianz ( Owen 2003a ) .Harmonizing to Lipton ( 2003 ) , there are several factors attributed to the prostration in the administration of HIH. Those factors are associated with an uneffective determination devising and a deficiency of concern judgement in fortunes of opposite insurance market conditions. The absence of a well-understood scheme was illustrated by the troubles in the operations in both the United Kingdom and the United States market.

Besides, an inappropriate reinsurance and an improper proviso degree reflected the understatement of liabilities. Similarly, the wholly inadequacy information of the board led to overestimate acquired company ‘s assets.The failures of civilization and mis-governance/mismanagement are likely the implicit in grounds of the Australia ‘s biggest corporate prostration, HIH. Badly, there was a important autumn in portion monetary value below an insurance sector norm and an inadequacy up to AUD5.

3 billion ( Mellahi 2005, p. 266 ) . HIH was placed into probationary settlement on 15 March 2001 and is still run-off presents ( Owen 2003a ) . Sing to put on the line direction that is about wealth creative activity and protection by helping a corporation to do a determination how to cover with hazards, HIH hence should turn to stuff concern hazards of its company.

However, in pattern, it does neither place hazards nor implement hazard interventions doing a ruinous event. In general, board of managers has responsible to understand, endorse and proctor company ‘s schemes in line with a hazard direction procedure, which are proposed by direction. Conversely, both the board and direction of HIH failed to move on their stewardship. One of the chief grounds that the board failed to carry through its function as proctor is the civilization of the council chamber.

Culture refers to the collegiate ambiance that prevents any member talking out against the senior direction ‘s position ( Monks and Minow 2001, p. 189 ) . For illustration, Chief Executive Officer ( CEO ) controls the board ‘s docket, information and compensation without any challenging of board members about his authorization and influence. As the being of this civilization, the board therefore seems to be accused as “ old male child ‘ nines ” ( Monks and Minow 2001, p.

189 ) . This paper will discourse how the civilization did non suit with the company statements.While the environment alterations overtime, the company schemes had ne’er been considered and revised to reflect its go oning sustainability growing ( Owen 2003a ) . The board was risk-ignorance and did non understand company schemes.

Therefore, they would hold no right inquiries to guarantee whether schemes are decently executed in the right way or non ( Lipton 2003, p. 275 ) . Likewise, an independent due diligence reported that Ray Williams, the HIH ‘s CEO, had strongly influenced on the company and might move on his ain involvements instead than company ‘s benefits ( Lipton 2003, p. 274 and Owen 2003a ) .

A civilization job is hence one of the major hazard direction issues. The acquisition of FAI can be a good case of the board and direction ‘s function job, caused by and affected on a hapless corporate administration civilization. General speech production, a corporation is advised to exert a due diligence in doing a determination but the FAI ‘s CEO refused to let the due diligence procedure ( Owen 2003a ) . More earnestly, the HIH ‘s board and direction did nil to oppose his action, the coup d’etat hence is continuously proceed by merely trusting on the publically available information ( Owen 2003a ) .

Furthermore, five of 12 managers were non present in the meeting due to the lateness of the notice ( Lipton 2003 ) . Of the three managers were present in individual and the staying managers, who might non hold adequate relevant information, merely participated by picture conference ( Lipton 2003 ) . Importantly, since deficiency of cognition about the FAI ‘s fiscal place, the company did non detect that FAI had a job about an inordinate modesty shortage ( Owen 2003a ) . The intensifying impact made HIH confronting more troubles because at that clip HIH itself had a reserving job every bit good.

The overall costs of the FAI acquisition from overpayment have been estimated at AUD590 million ( Owen 2003a ) . It can be seen that the determination to coup d’etat FAI went in front with deficient readying and probe ensuing from a civilization job. In footings of hazard types, strategic hazard is defined as the hazard to net incomes from inauspicious concern determinations or improper execution of those determinations. Operational hazard refers to exposure to loss taking to inadequate or failed internal procedures, people and systems or from external events.

It is likely to be some convergences between strategic and operational hazards, the hazard issue of HIH therefore might be classified as both. A back uping illustration is that though HIH had a corporate administration theoretical account presented in the one-year study, there was a small grounds that the board often examined the HIH ‘s corporate administration rules to guarantee that they were suited to the company and continued pattern, Owen ( 2003a ) claimed. Furthermore, the board misunderstood long-run every bit good as relevant concern schemes and besides was missed chances to accomplish them.These could travel to the bosom of corporate administration failure.

Although it can be argue that related-diversification acquisition can bring forth positive results to an acquirer, it is irrelevant in the FAI instance. The HIH ‘s CEO insisted that FAI acquisition would honor the company at sensible returns, which is apart from sweetening of well-known repute, remotion of a rival, enlargement of distribution channels and synergism ( Owen 2003b ) . The board wholly failed to see the hazards: under-estimated proviso and mispricing posed by continuing the FAI coup d’etat.It is likely obvious that the debatable determination doing process of HIH should be concerned.

As a modesty represents future duties of an insurance corporation, it is one of indispensable tools to mensurate a corporation ‘s fiscal wellness. Outstanding Claim Provision ( OCP ) is a cardinal critical point reported on the liability side of a general insurance company ‘s fiscal statements ( equilibrate sheet ) . For HIH, a cardinal concern is a general insurance, OCP therefore shown about a half of its liabilities ( Owen 2003a ) .The maintaining of OCP degree is to guarantee a corporation ‘s abilities to run into every claim from the policyholders occurred in the hereafter.

Improper proviso either unequal or inordinate can show a false image of a company ‘s fiscal conditions and cause serious jobs. Therefore, the degree of a modesty plays an of import function in a monetary value hazard sing an addition in figure of underwriting policies every bit good as the size of insurance contracts. Since 1995 the figure of acquisitions increased aggressively both local and international concern because of the rapid growing in HIH operations ( Owen 2003a ) .However, the company appeared systematically to hold an under-provision, which is neglected to supply properly operation turning quickly for future committednesss.

Its board and direction failed to hold on an chance to place and manage this job. Findingss like this, theoretically, administration involves monitoring and supervising a corporate way as strategy-oriented, while direction relates to task-oriented associated with administrating a corporate operation, both mis-governance and misdirection hence could be identified as another hazard direction issue of HIH.To put a proviso figure, the board relied on external specializers ‘ studies. They did non detect the critical premises ; such as price reduction rates and claims-handling costs which are used as an actuarial-based modesty ( Owen 2003a ) .

It may be questionable why such a immense insurance company did non understand and concern about this cardinal issue peculiarly in its adept field. Lipton ( 2003 ) pointed out the fact that CEO promoted entirely close individual, such as his friends, going the board or direction of company. It implies that those may make non hold plenty professionally actuarial cognition in their background.As a effect, this was instrumental in a deficiency of answerability by senior direction to the board and a deficiency of independency within the board.

Owing to an inappropriate concern determination, this issue can be identified as the strategic and operational hazards every bit good as may make some extent of hazards. On the top of that Devid Slee of David Slee Consulting Pty Ltd was the HIH ‘s confer withing actuary and was besides Williams and Payne ‘s former co-worker in CE Health plc ( the bulk stockholder of HIH in subsequently ) ( Owen 2003b ) .Obviously, Slee had remarkably close relationship with two laminitiss. This possible contributed to a weak independent study.

For illustration, no prudential border was recognised in Slee ‘s appraisal, excessively high gauging price reduction rate and presuming to the full recoverable of reinsurance in his study ( Owen 2003b ) . These are likely to let HIH to print healthier its fiscal place than it should. The decrease in its distribution to a proviso can do to misdirect the usage of inordinate financess. Besides, the company would expect with its higher expected return from investings.

Without incredulity of utilizing information, HIH was operated careless of hazards incurred from the under-provision scene. Another hazard type that HIH faced is ordinance hazard, which refers to the possible loss originating from the uncertainness of legal proceedings impacting the corporation alteration, such as bankruptcy. In 2000, the prudential ordinances of the Australian Prudential Regulation Authority ( APRA ) , the chief regulator, enforced the investment banker to increase capital adequateness demands of insurance companies ( Owen 2003a ) . As a effect, it led to the deficit of HIH ‘s modesty degree.

The company had non adequate capital to cover insurance hazards for many old ages and so might be no longer a traveling concern of its operation. All in all, hazard direction was non in advancement to decide the modesty deficits in that period. Trying to specify the form of HIH civilization, it may separate as the ‘fiefs ‘ . A fief civilization refers to a private company civilization, which is the leader authorization is influential in significant countries such as investing and acquisition ( Birkett 1999 ) .

It besides infers that the hazard orientation of company is risk ignorance ( Birkett 1999 ) .Williams, the laminitis and CEO of HIH, is likely no better illustration in this point. The dominant main executive had no clearly identified limited of his authorization in investing, contribution, and wage ( Lipton 2003 ) . More significantly, the policy on modesty affairs besides came frontward the personal-based discretion of CEO intensifying excessively optimistic prospective studies by a dependant adviser, Slee ( Owen 2003b ) .

Alternatively of holding disbelieving reappraisal and O. K. , the board merely accepted Slee ‘s suggestions of proviso degree without refering the built-in hazards of the appraisal ( Owen 2003b ) .This might demo unknowingness of hazards occurred among managers and the influence of William is seemingly overriding.

Such an influence needs to intentionally reexamine, argument and inquiring, but the HIH board had done nil. It could reason that deficient answerability and independent happened within the board and senior directions. Furthermore, mentioning to Augustine ( 2000 pp. 7-27 ) theoretical account which is to pull off hazards, such participant functions involved in HIH had done in neither the first two stairss of crisis direction, as bar and readying for the crisis, nor the latter measure, acknowledgment.

Recognising, in line with resolution, the crisis had come belated to HIH as a consequence of a calamity. The company did non derive any favourable results ( net income ) signifier this crisis every bit good. It besides conducted to a lacking recovery claim which brought important loss to policyholders and made the company ‘s liability to be default. The HIH so went bankruptcy eventually.

Furthermore, the fiscal magnitude of HIH prostration is perchance the Australian ‘s biggest and hence it can be comparable in comparative to Enron ( the American energy company ) dirt.Similar to Enron, HIH attributed to managerial failures, particularly the immediate function of senior direction. They seemed to hold had an under-involved and under-informed the board. In contrast to Enron, HIH have non been reported a large-scale fraud or insider extractions.

HIH still retained features of a private company dominated by its laminitis and CEO. Williams had an authoritarian influence on an enlargement determination devising, whereas the present board ignored to inquiry and concern about a connexion between acquisitions and other schemes of company that is a instance in point.Meanwhile, APRA ( 2001 ) revised a new version of prudential criterions for general insurance companies in Australia. There were six criterions have been released, including ‘Liability Valuation ‘ – to advance the proviso of actuarial advice to the board and direction, ‘Capital Adequacy ‘ – to keep a minimal degree of capital with the hazard profile and ‘Risk Management ‘ – to advance strong corporate administration by accessing to allow independent expertness and systems for placing, managing and monitoring hazards.

In a twelvemonth subsequently, 2002, the Australian Securities Exchange ( ASX ) Corporate Governance Council was formed to develop a corporate administration practical guideline for the Australian listed companies. Elizabeth ( 2003 ) besides advocated that a corporation ‘s hazard direction scheme is required to include in a study as an indispensable portion of corporate administration. Harmonizing to ASX ( 2007, p. 32 ) , the recent corporate administration rules and recommendations suggest that corporations should set up policies to pull off material concern hazards every bit good as unwrap those policies.

Likewise, the board should oversight a direction squad to efficaciously pull off corporate hazards by planing and implementing the hazard direction system ( ASX 2007, p. 33 ). Many of HIH ‘s troubles are attributed to assorted factors. Owing to immense impacts, in footings of graduated table and range, a failure of civilization and mis-governance/mismanagement can be addressed as the chief hazard issues.

There was no seemingly defined statement of responsibilities or limited on authorization for direction.The board had inability to understand and supervise HIH ‘s schemes every bit good as a hazard direction procedure, whereas senior direction had excessively influence on managers. Consequently, a deficiency of readying ensuing in overrating FAI ‘s value put force per unit area on its operation. At that clip, modesty schemes itself had already been staged HIH a job.

Such uneffective hazard designation in bend led the company to disregard a measuring of hazard that is in peculiar necessity in an insurance industry.It besides neglected to take into history the associated counterproductive effects under ongoing premise. HIH had later big graduated table of negative results and so collapsed in conclusion. During periods of corporate failure, tendencies of reformatory corporate administration and increased ordinances and recommendations occur.

The HIH crisis is one of a good instance to be learned about corporate administration and hazard direction issues as following lessons: Risk direction should be considered as the precedence of the corporate policies.The civilization job and mis-governance/mismanagement ; such as the HIH corporate administration guidelines being non adhere often, the bad determination doing into enlargement, and inadequate of concern judgements, are failure in the hazard designation and direction. The fact that hazards are ceaseless and critical issue for all corporations, the company hence should add its value through holding hazard direction precedence. Accountability is critical at all degrees of a corporation.

With no attending to unfavourable information, the board did non utilize their incredulity to oppugn senior directors when or where hazard affairs.This caused a deficiency of answerability for public presentation among senior direction and the board. Owen ( 2003a ) recommended that the amendment of Corporation Law and constitution of ASX corporate administration rules and recommendation could guarantee that duty can be held for any employees and experts ‘ actions. Beware the qualified and experient boards, it does non vouch the success.

Between 1997 and 2001, HIH board comprised insurance experts, qualified comptrollers and hearers. With a assortment of expertness, the board was still ineptitude and under the control of CEO.They did non oppugn the cardinal issues and besides waived regulations and guidelines. Owing to the board improperly transporting out its functions, it was unable to supervise direction public presentation and proposal by citing from approved schemes.

Findingss like this, it can be suggested that the company should reconstitute board of managers by altering the proportion of inside/outside managers on board in order to increase independency of the board and to guarantee that it can add value to the company by regulating the concern chiefly on behalf of stockholders ‘ involvements.A corporation must exert due diligence before doing a determination ( Owen 2003a ) and besides corporate liabilities need to be decently valued and disclosed. Due to deficient preparatory and fact-finding plants, the board decided to get FAI. They wholly failed to see the hazards posed by the coup d’etat.

Besides calculated use of claim appraisal by FAI direction and HIH itself contributed to unostentatious liabilities which had arisen because HIH was misgoverned every bit good as mismanaged.Due to excessive under-reserving, HIH had deficiency up to AUD5. 3 billion and no longer last at the present clip. Regulators need to be more proactive.

As reference above, the new ordinance established by APRA every bit good as ASX corporate administration guideline and rule likely have an aggressive enforcement civilization to guarantee that this crisis will non reoccur. In decision, good corporate administration involves in company value sweetening and hazard direction. Hazard exists at the bosom of any concern taken in the hunt for wagess.Corporations hence should be cognizant of hazards and effort to cover with them.

Failing to make this, such as in the HIH instance, it may do such multi-billion losingss. This crisis besides contributes a assortment of lessons and deductions to all stakeholders. To avoid a calamity, continued attempts to do corporate administration both improve corporate public presentation and heighten corporate answerability every bit good as to continue hazard direction are critical and ongoing in order to extenuate the most detrimental results whilst promoting the most positive.

Literary Analysis Of Great Gatsby

According to The American Heritage New Dictionary of Cultural Literacy, American society operates on the principle that an individual’s achievements can be rewarded by upward social mobility. What a simple concept! Work hard, be honest, strive for success, and you will be rewarded by fame, fortune, and movement up the social ladder of life. But, as F. Scott Fitzgerald’s book, The Great Gatsby, demonstrates it’s really not that elementary. Being a member of the ‘elite, upper class’ can find you with a greed for money, which many times is achieved through unethical ways.

In his book, Fitzgerald illustrates social values and social class differences, as well as depicts the mistaken excitement of the American Dream by using a variety of themes and symbols. Throughout this book, we can see the social class values and differences and the connection to their geographic location. For example, East Egg was the area that represented the “old” aristocracy, and the place that Tom and Daisy Buchanan lived. The East Egg wealthy had grace, class, and elegance, which was seen in the exceptionally tasteful home of the Buchanan’s, as well as with the beautiful white dress that Daisy wore.

However, these ‘born rich’ individuals were careless and inconsiderate, as was seen at the end of the book, when the Buchanans did not attend Gatsby’s funeral. West Egg, on the other hand, was the place of the ‘self-made, newly rich’. Jay Gatsby lived in West Egg and his wealth was a result of his involvement with organized crime and bootlegging. The West Egg wealthy were portrayed as gaudy, vulgar individuals who lacked taste and social skills. For example, Jay Gatsby has a pink suit, drives a Rolls-Royce, and lives in a showy, humongous, mansion.

The Valley of the Ashes, which lies between West Egg and New York City, symbolizes the poor, like George Wilson, who lives among dirty ashes that were a result of the dumping of industrial waste. Fitzgerald uses many symbols to portray different ideas throughout the novel. For example, color symbols are frequently seen. Green, the color of money, is used when Gatsby says that Daisy’s “voice is full of money” (127). In Chapter One, at the end of Daisy’s dock, there is a green light which represents Gatsby’s hopes and dreams.

Gatsby, barely able to even see the light, reaches toward it, as if he is reaching toward his goals in the future, which he never reaches. The color grey represents hopelessness and lack of life, as everything in the Valley of Ashes is colored with grey dust and ashes. Usually, the color white symbolizes purity, the classic color worn by ‘first time’ brides. However, in The Great Gatsby, it represents false purity. For example, Daisy and Jordan often wear white, yet they are definitely immoral characters.

In addition, Gatsby wears white when he meets Daisy for the first time in five years, yet his life has been far from pure with his involvement of organized crime and bootlegging. In addition to color, ‘eyes’ are a dominant symbol. “The eyes of Doctor T. J. Eckleburg are blue and gigantic – their retinas are one yard high. ” (27). It is very apparent that Fitzgerald is referring to not only the eyes of God looking over the world, but also those of Nick, who really knows what is going on. | | Fitzgerald tries to give you a feel of the wealthy life style in the twenties.

Fitzgerald shows examples of this by portraying Gatsby’s parties. At Gatsby’s parties, no one is ever to find Gatsby. These parties are always very elegant. Men are dressed in black tux while women are wearing extravagant dresses. The guests usually drink champagne and eat elegant foods. In the Great Gatsby, Tom cheats on Daisy and Myrtle cheats on Mr. Wilson. The only true relationship Fitzgerald writes about is Nick and Jordan. Nick meets Jordan and instantly feels physically attracted to her.

This relationship lasts through most of the story until Jordan tells nick she is engaged, nick then immediately leaves her. Near the end of the story daisy sees Myrtle in the street and runs her over. Myrtle ends up dying and Mr. Wilson blames it on Gatsby. When Mr. Wilson sees Myrtle, Tom tells him that it was Gatsby’s car. Mr. Wilson furiously travels to Gatsby’s house and finds him in the pool. Mr. Wilson then pulls out a gun, shoots Gatsby and then shoots himself. In every story you can find themes. In the Great Gatsby, as you read, you think the main theme is love between a man and woman.

When you look deeper into the story there is a much larger them. The major theme of the story is living the American Dream, but for the people of West Egg the American Dream is prosperity and an excess of material. Why does Fitzgerald portray the twenties as deteriorated social morals? Another theme Fitzgerald uses is the emblems of social trends. Nick and Gatsby both fought in the first World War, this shows new problems brought by war. Fitzgerald originally saw the American Dream discovery and the pursuit of happiness.

However as you read on you see that money and materialism has tainted the original American Dream Fitzgerald saw. The final theme is violence, throughout the story Fitzgerald uses the world violent or violently. I think this portrays the conflict that he experienced through his life. Life during the ‘Gatsby era’ was much different than the life we live today. In 1920, the war is finally over and it is now time to look forward not backward. The twenties were a time of prosperity and innovation. During the twenties the new woman was born, the flapper.

The flapper was a woman steeping outside the norm, she worn different clothes, ate different foods, had different haircuts, and participated in different activities. The 1920’s were also a time of reform. The sale of alcoholic beverages was now illegal. This brought what I feel summarizes the twenties bootleggers. Bootleggers were like our current day drug dealers; these were the men that illegally transported and sale of alcohol. During this time there was also birth. Jazz, was the style of music that everyone moved and listened to.

The stock market grew and the birth of ‘materialism’ was fundamental to the ‘tainted’ American Dream. And at the end, Gatsby is dead; Myrtle and George Wilson are dead; Tom and Daisy headed back West, and all that’s left is Nick. Nick is standing on Gatsby’s beach, “brooding on the old unknown world” (189). As he’s standing there, he’s thinking that we all chase after our “mistaken” American dream, believe that one day we’ll achieve it—but in reality, we’re just “boats against the current, borne back ceaselessly into our past” (189).

Blood Pressure Lab Report

Background Information

According to the Harvard Medical School Family Health Guide, normal blood pressure is a systolic pressure of less than 120 and a diastolic pressure of less than 80 (livestrong.com). Systolic pressure is defined as the highest arterial blood pressure reached during any given ventricular cycle (Dictionary.com). Diastolic pressure is defined as the lowest arterial blood pressure reached during any given ventricular cycle (Dictionary.com). The standard way to measure blood pressure is with the patient’s arm extended and relaxed while the patient is sitting (smc.edu).

National Guideline Clearinghouse research shows that diastolic blood pressure is approximately 8 mm/Hg higher in a laying down position that when a patient is sitting (livestrong.com). Results have also shown that systolic pressure is about 8 mm/Hg higher in the lying down position than in the sitting position (livestrong.com). A millimeter of mercury per a unit of pressure is expressed as mm/Hg (webmd.com). According to livestrong.com, back support also plays a role in blood pressure measurements (livestrong.com). How does your body position play a role in your blood pressure measurements when your legs are above your head and heart?


If a subject lays with their buttocks and legs up against a wall above their head and heart for 15 seconds, then the blood pressure will increase by .5mm/Hg, because the body position of having legs above your head and heart will affect the flow of the blood which will cause the systolic and diastolic pressures to change, resulting in a higher blood pressure.


The independent variable in this experiment was the body position. In every trial the body position was controlled by the subject and was the same; legs and buttocks against the wall with back on the ground and left arm extended

for the blood pressure test.

The dependent variable was each subject’s blood pressure. A resting blood pressure was measured before we began the trials on each subject. The blood pressure cuff measured each subject’s blood pressure. The blood pressure cuff was started on each test subject after the legs were up for 00:15 seconds.

There were many factors that could be controlled in the experiment. There were 20 trials for each subject. The gender was consistent with all girls. Age varied from age 15 to age 18. All 3 of the test subjects were tested in the hallways of Fishers High School during a quiet time when the area was empty of other students with no distractions. The temperature was constant throughout at 72 degrees Fahrenheit. The tester varied between test subjects, which could change the reaction times to the blood pressure cuff’s start/stop button. Test subject were also measured at different elevations; two test subjects upstairs, while the other was measured downstairs.


The three test subjects were sitting with their left arm rested and relaxed when the resting blood pressure was measured. The blood pressure cuff was secured on the left arm before the test subjects assumed their testing position. The trials began when the first test subject got into the testing position. The test subjects laid on the floor of the school hallway with legs and buttocks against the wall covered in lockers. The time started as soon as test subjects were in the exact body position on the stopwatch. As soon as the time reached 0:15 seconds, the start button for the blood pressure cuff was pressed. The cuff would inflate until it found the blood pressure, which would beep when finished. The blood pressure was measured in a fraction (mm/Hg) with millimeters of mercury on top and unit of pressure measurement on the bottom. The data was recorded in fractions into a notebook with a pen and later divided to become a decimal (ex. 121/78 = 121 ÷ 78 = 1.551). Decimals were rounded to the thousandths place. After each trial, the legs were brought down until the blood pressure came to a normal

level. The trial was repeated 20 times per each subject.


Raw Data

BLOOD PRESSURE AFTER ELEVATION OF FEET AT 90° ABOVE HEART FOR 15 SECONDS (+/- 1 sec.). Test Subj| Resting BP| Tested BP| Test Subj| Resting BP| Tested BP| Test Subj| Resting BP| Tested BP| A| 131/69| 103/58| B| 121/63| 102/58| C| 119/71| 95/49| A| | 105/63| B| | 104/51| C| | 117/60|

A| | 112/63| B| | 102/54| C| | 117/58|

A| | 113/60| B| | 114/65| C| | 123/62|

A| | 108/61| B| | 102/55| C| | 119/65|

A| | 107/64| B| | 106/50| C| | 122/63|

A| | 87/62| B| | 103/59| C| | 120/57|

A| | 95/65| B| | 110/50| C| | 129/59|

A| | 96/76| B| | 104/45| C| | 123/57|

A| | 109/61| B| | 101/53| C| | 119/56|

A| | 100/53| B| | 98/57| C| | 121/57|

A| | 97/56| B| | 109/52| C| | 117/55|

A| | 104/54| B| | 102/63| C| | 120/55|

A| | 101/51| B| | 108/75| C| | 120/56|

A| | 111/63| B| | 103/57| C| | 123/58|

A| | 90/61| B| | 97/59| C| | 115/50|

A| | 95/63| B| | 102/55| C| | 117/57|

A| | 99/54| B| | 101/54| C| | 125/61|

A| | 103/62| B| | 99/56| C| | 124/61|

A| | 100/67| B| | 100/54| C| | 119/54|


Processed Data


Resting heart rate was first taken from each subject (A, B, and C). This was recorded in a notepad in a fraction format (mm/Hg) to later be converted to a decimal format. In another column the trials were recorded in a fraction format (mm/Hg) and also converted to decimal format later. Once the data was processed to the decimal formats, the average of the tested blood pressure was subtracted from the average resting heart rate to find the difference.

Sample Calculation

121/78 mm/Hg (fraction format) 121 ÷ 78 = 1.551 1.551 (decimal format)

Processed Data Table

BLOOD PRESSURE AFTER ELEVATION OF FEET AT 90° ABOVE HEART FOR 15 SECONDS (+/- 1 sec.) AND DIVIDED INTO A DECIMAL FORMAT. Test Subj| Resting BP| Tested BP| Test Subj| Resting BP| Tested BP| Test Subj| Resting BP| Tested BP| A| 1.899| 1.776| B| 1.921| 1.759| C| 1.676| 1.939| A| | 1.667| B| | 2.039| C| | 1.95|

A| | 1.778| B| | 1.888| C| | 2.017|

A| | 1.883| B| | 1.754| C| | 1.983|

A| | 1.77| B| | 1.855| C| | 1.83|

A| | 1.672| B| | 2.12| C| | 1.936|

A| | 1.381| B| | 1.746| C| | 2.105|

A| | 1.462| B| | 2.2| C| | 2.186|

A| | 1.263| B| | 2.31| C| | 2.157|

A| | 1.787| B| | 1.905| C| | 2.125|

A| | 1.887| B| | 1.719| C| | 2.122|

A| | 1.732| B| | 2.096| C| | 2.127|

A| | 1.925| B| | 1.619| C| | 2.181|

A| | 1.98| B| | 1.44| C| | 2.142|

A| | 1.98| B| | 1.807| C| | 2.121|

A| | 1.475| B| | 1.644| C| | 2.3|

A| | 1.508| B| | 1.854| C| | 2.053|

A| | 1.833| B| | 1.87| C| | 2.049|

A| | 1.661| B| | 1.767| C| | 2.033|

A| | 1.492| B| | 1.852| C| | 2.203|

AVG| 1.899| 1.695| | 1.921| 1.863| | 1.676| 2.077| SUBJECT A| | | SUBJECT B| | | SUBJECT C| | |

Presentation of Processed Data






How does the position of the body affect the blood pressure? Blood pressure in this experiment only increased on an average of .046. The average resting blood pressure was 1.832 while the average tested blood pressure was 1.878. Body position does increase the blood pressure of one’s body when the feet are above the heart by 90° by .04mm/Hg, not .5mm/Hg. Evaluation

Like most experiments, there are factors that will affect your experiments; such as errors and things going wrong. The person conducting the experiment could have been off one or two seconds when pressing the start button on the blood pressure cuff. The subject could have not waited for the blood pressure to go back to normal before beginning a new trial. The environment may have not been the best for testing against lockers and on a hard, carpeted floor. Overall, the experiment was completed effectively and shows that body position does, in fact, affect blood pressure.


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“Hypertension (High Blood Pressure) Health Center – WebMD.” WebMD. WebMD. 28 Feb. 2013 <http://www.webmd.com/hypertension-high-blood-pressure/default.htm>.

“Systolic pressure.” Dictionary.com. Dictionary.com. 28 Feb. 2013 <http://dictionary.reference.com/browse/systolicpressure>.

“Understanding Blood Pressure Readings.” Understanding Blood Pressure Readings. 28 Feb. 2013 <http://www.heart.org/HEARTORG/Conditions/HighBloodPressure/AboutHighBloodPressure/Understanding-Blood-Pressure-Readings_UCM_301764_Article.jsp>.