1.0 Introduction Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way in which a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many players involved (the stakeholders) and the goals for which the corporation is governed. The principal players are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large. Corporate governance is a multi-faceted subject. An important theme of corporate governance deals with issues of accountability and fiduciary duty, essentially advocating the implementation …show more content…
Determine the company's vision and mission to guide and set the pace for its current operations and future development. ii. Determine the values to be promoted throughout the company. iii. Determine and review company goals. iv. Determine company policies • Set strategy and structure i. Review and evaluate present and future opportunities, threats and risks in the external environment and current and future strengths, weaknesses and risks relating to the company. ii. Determine strategic options, select those to be pursued, and decide the means to implement and support them. iii. Determine the business strategies and plans that underpin the corporate strategy. iv. Ensure that the company's organizational structure and capability are appropriate for implementing the chosen strategies. • Delegate to management i. Delegate authority to management, and monitor and evaluate the implementation of policies, strategies and business plans. ii. Determine monitoring criteria to be used by the …show more content…
The board is directly accountable to the shareholders and each year the company will hold an annual general meeting (AGM) at which the directors must provide a report to shareholders on the performance of the company, what its future plans and strategies are and also submit themselves for re-election to the board. The objects of the company are defined in the Memorandum of Association and regulations are laid out in the Articles of Association. The board of directors' key purpose is to ensure the company's prosperity by collectively directing the company's affairs, whilst meeting the appropriate interests of its shareholders and stakeholders. In addition to business and financial issues, boards of directors must deal with challenges and issues relating to corporate governance, corporate social responsibility and corporate ethics. A corporation's shareholders have an ownership interest in the company, by having money invested in the corporation. A "share" is an apportioned ownership interest in the corporation, and the value of a single share can range from less than a 1% interest in the corporation, to
a) Examine the business practices of your chosen organisation and consider whether these activities demonstrate responsible corporate behaviour.
The corporation’s business is carried out by its management, under the direction of the Board of Directors. The Board, and each committee of the Board, has complete access to management. Also, the Board and committee member’s has access to independent advisors as each considers necessary or appropriate. Mallor, Barnes, Bowers, & Langvardt (2010) state that the Board of Directors also, issues shares, Adopts articles of merger or sha...
In this an organization must know what is their target market? Where they have to compete? Who are their rivals and what are their possible strategies? And finally what should be the company strategy for survival in that competitive market.
4. Make a plan Choose the action alternative most likely to accomplish your objectives; describe what must be done to implement this course of action.
He/she should evaluate the present situation and also identify better policies and procedures that can be used in
2: Analyse the environment. They have recognised that many areas that they operate in are suitable for expanding existing operations. 3: Identify opportunities and threats.
Bibliography: Turnbull, S. (1997). Corporate governance: its scope, concerns and theories. Corporate Governance: An International Review, 5 (4), pp. 180--205.
Organizations that only have top management as the board members are more susceptible to accounting malpractices. Members of the board should preferably own shares in the company to ensure diligence when it comes to the interests of the company. Apart from the Board of Governors, there should also be an audit committee in place to oversee the financial dealings of the bank. Members of the board and the audit committee should have basic financial knowledge. Some of the members should also be experts in finances so that they can detect any anomaly that may take place in terms of financial reporting. An overhaul of the regulatory framework is required to empower authorities to intervene immediately, and make improvements. New technology is required. Manual antiquated processes should be eliminated because this causes greater human error and poor
For setting directors’ remuneration, the board must form a Remuneration Committee. A prior approval from the shareholders of the members on the committee is recommended. However, when it is not possible for solid reasons, the members must be presented in the AGM to the shareholders for approval if they are already appointed. The following guidelines must be followed:
Nottingham Trent University. (2013). Lecture 1 - An Introduction to Corporate Governance. Available: https://now.ntu.ac.uk/d2l/le/content/248250/viewContent/1053845/View. Last accessed 16th Dec 2013.
Along with answering these questions, one must also determine what type of strategic strategy their company is following.
Corporate governance is “the system by which companies are directed and controlled”. It involves regulatory and market mechanisms and the roles and relationships between a company’s management’ its board its shareholders’ and the goals for which the corporation is governed. In contemporary business corporations, the main external stakeholder groups are shareholders, debt holders, trade creditors, suppliers, customers and communities affected by the corporation activities. Internal shareholders are the board of directors, executives, and other employees. Much of the contemporary interest in corporate governance is concerned with mitigation of the conflict
In a much broader sense, the owners of a corporation can be further divided into shareholders and board members. A shareholder is defined as an individual, company or institution that holds a share in the company. Shareholders can, hence, be regarded as the owners of the company and, therefore, have several legal rights. Shareholders are important providers of the company’s capital and, therefore, have a significant amount of influence in the management of the company. According to Friedman, a corporate executive 's responsibility to his owners includes carrying out business operations that fulfil the owners ' or shareholders ' desires of maximizing profits in accordance with the legal and ethical rules followed by society. Apart from maximizing shareholder value, a corporation must provide shareholders the right to vote in the organization and the liberty to buy and sell shares as they
Human beings are continuously engaged in some activity or other in order to satisfy their unlimited wants. Every day we come across the word “business” or “businessman” directly or indirectly. Business has become an important part of life. A business is an organization where people work together. A business can earn a profit for the products and services it offers. Corporate governance broadly refers to the mechanisms, processes and relations by which corporations are controlled and directed.
Additionally, understood the strategy implementation, actions made by firms that carry out the formulated strategy, including strategic controls, organizational design, and leadership. environmental