An Analysis of Bombardier Inc.:
Keeping it in the Family
Depending on the perspective taken Bombardier is either a success story, a money pit, a government subsidized boondoggle, or simply an interesting case study of a family corporation that has succeed in the good times and weathered the bad times with the family at the helm. Family-controlled firms make up approximately 80% of companies worldwide and 20% of the Fortune Global 500. Bombardier is among those on the Fortune 500 and their commitment to keep it in the family has been restated on numerous occasions.
In this paper we will look at Bombardier’s history, its Board and how that board is structured and populated, and its interactions the Executive. We will also evaluate the make of board committees and the responsibilities of these committees. As we examine the functions and functionality of the board we will also consider the role external auditors play and Bombardier’s ethics culture and the role of the Board and CEO within that culture.
Using the information gathered during the analysis, we will identify potential opportunities for improvement within the board structure and its governance and conclude with an assessment of how those identified opportunities might be received by the current Board.
History
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Bombardier Inc.
is a Canadian multinational aerospace and transportation company which started in 1942 as a maker of snowmobiles. Headquartered in Montreal, Quebec it grew over the years into a large manufacturer of regional airliners, business jets, mass transportation equipment, recreational equipment and a provider of financial services. Bombardier is a Fortune Global 500 conglomerate company (2017, Wikipedia). Today, Bombardier Inc. has grown to 64,000 employees across 80 production sites in 28 countries and as of 2015 year end reported 18.2 billion dollars annual revenue with a net income of 326 million dollars (2015, Bombardier Annual
Report). As a result of declining revenue and decreased stock values the organization began to reorganize to strengthen their foundation and rebuild their business. Decisions included cancelling a Lear Jet program, laying off 7,000 employees, right sizing the business and driving down the direct and indirect costs as well as inventory levels. The organization also restructured their senior leadership team with only two leaders remaining from the previous team and has indicated this restructure allowed a gain in industry specific knowledge and credibility and improved customer confidence (2015, Bombardier Annual Report). In 2017, consolidated revenue is forecasted to grow by 1-3% with expected growth in their rail and airplane business (2015, Bombardier Financial Report). In October 2015, the Québec government announced a $1-billion equity investment in Bombardier to secure a 49.5% stake in their aircraft program and Caisse de dépôt et placement du Québec (CDPQ) announced a $1.5-billion equity investment in Bombardier for a 30% stake in their rail transportation business (2015, Bombardier Annual Report). The $1-billion was viewed as a step by the Quebec government to alleviate concerns from investors over the company’s liquidity and considered as a subsidy by market observers (Van Praet, 2016). The Quebec government is attempting to leverage their investment by requesting a matching investment from the federal government (Doern and Stoney,2016)
April 16th 1907, Joseph-Armand Bombardier, a Canadian inventor and entrepreneur was born. Bombardier grew up in the eastern Quebec village of Valcourt. The ambitious young bombardier wanted to come up with a solution to make it much easier to travel through the snow-covered roads. Through Bombardier’s earlier years, he started his own garage where he worked and honed his mechanical craft. In his spare time, Bombardier worked hard to create an automobile that could travel easily on snow.
Addition to caring to the guests, westjet involve in many community investment, which reveal that westjet's culture of caring has not ended at the aircraft door. (3)Westjet take contribution to the society as their responsibility and participate in charity programs, such as Missing Children Society of Canada and The Canadian National Institute for the Blind. It is not hard to say that westjet is very caring and thoughtful.
When it comes to the audit objectives, the public and the auditing profession maintain varying expectations. The public expects the prevention of fraud to be the auditor’s responsibility. However, the auditors believe that they are responsible for fraud detection, but not obliged to find all of it. In addition, the public views the fraud by the characteristics displayed by management and employees. For example, WoolEx Mills’ management wanted to exude a prevailing financial position and to uphold reputations. By committing financial statement fraud, it made the company look successful even though Sales and cash flows were decreasing. The public would view these particular characteristics as pressures to why the company committed fraud. Greed, recognition, and influences also impacted the public’s view of Wool Ex Mills’ fraud scheme. The CEO used authority to influence employees to take part in the fraud scheme. The public would see that the CEO utilized power to manipulate shareholders, which impacted their trust with WoolEx Mills (Cohen, Ding, Lesage, & Stolowy 2015) (Krishnan & Shah
that are driving the growth in this division are the RJ, the Global Express, and
As per research Bombardier has already been investing heavily to modify its products accordingly to meet the standard of global economy. To increase their procedures, they have joint various strategic alliances with businesses and formed several joint ventures. Bombardier has formed multiple alliances with different companies throughout the world, to ensure steady growth and sales. It has many engineering and manufacturing sites in many countries. Bombardier succeeded to expand its operations in: Europe, Asia-Pacific, North America and South America. In order to successfully strive in growing markets,
When examining the major impact of an airline, one should take into account the airline’s history. Air North -the Yukon’s airline has been around for 36 years and dates back to the 1970’s. Air North is a regional based carrier that provides service within the Yukon (the westernmost and smallest of Canada’s three federal territories) between the Yukon and British Columbia, Alberta, Northwest Territories and Alaska (Fly Air North, 2013). These services also include scheduled passenger service, charter services for passenger and/or cargo and cargo and ground handling services (Fly Air North, 2013). The charter passenger service is provided throughout Canada and the United States. The Yukon’s airline is headquartered in Whitehorse, Yukon. It is the largest airline in the Yukon and is one of only five Canadian carriers that provide a year round scheduled domestic air service with jet equipment (Fly Air North, 2013). The airline also has over two hundred full-time and part-time employees in the Yukon and also operates a base in Vancouver, which employs over sixty people. Air North is one of the largest private sector employers in the Yukon (Fly Air North, 2013). Interestingly enough, is that one of fifteen Yukoners hold an equity or employment stake in Air North, Yukon’s Airline (Fly Air North, 2013).
The oversight responsibilities of the board, the CAE lacking of expertise or broad understanding of financial controls and responsibilities, and the understaffed internal audit functions lacking of independence and direct access to the board of directors contributed to the absence of internal controls. To begin with, the board should be retrained to achieve financial literacy to review financial reporting. Other than attending formal meetings, the board of directors should be more involved with the management. For the Audit Committee, the two members who were recruited as acquaintances to Brennahan need be replaced with experts who are more sufficiently knowledgeable about accounting rules beyond merely “financially literate”. Furthermore, the internal audit functions need to expand with different expertise commensurate with the expanded activities of the organization, testing financial reporting rather than internal controls from an operational perspective. The CAE should be more independent and proactive to execute audit plans, instead of following orders from the CFO, and initiate a direct and efficient communication between internal audit and audit
The Boeing Company originally started out as the Pacific Aero Products Co., which was founded on July 15, 1916. The name was changed about a year later to The Boeing Airplane Company. The Boeing Company stayed relatively small until World War I when they were selected by Navy officials to produce an order for 50 model C's planes for the war efforts. The company continued to prosper and by the late 1950s, Boeing President William Allen knew that the company had the scientists, the experience and the facilities to lead the company into uncharted territories. He was right, Boeing has emerged as the leading aerospace company in the world today.
The Boeing Corporation is one of the largest manufacturers in the world. Rivaled only by European giant Airbus in the aerospace industry, Boeing is a leader in research, design and manufacture of commercial jet airliners, for commercial, industrial and military customers. Despite enjoying immense success in its market and dominating an industry that solely recognizes engineering excellence, it is crucial for Boeing to ensure continued growth through consistent strategy formulation and execution to avoid falling behind in market share to close and coming rivals.
This topic was selected among a series of topics of general interest in the area of strategic audit for a corporation, as a class requisite. The different aspects of development and research studies findings are discussed in detail or briefly. The subject of “Strategic Audit of a Corporation” is what this paper is about. Some of these topics are briefly discussed. Ford Motor Company
While no company perfectly manages its resources, Boeing has proven itself to be one of the better firms in that regard, and with its approach to innovative technology and prudent management of their assets they will probably be around long enough to further improve on an already solid foundation.
As Boeing’s CEO, Frank Shrontz promised to increase earnings and return on equity. Boeing had a history of making money when its competitors did not, but Mr. Shrontz wanted higher returns. The airline industry was characterized by large cash outflows for R&D and manufacturing and long payback periods over long life cycles for each new airframe design. Companies had to have deep pockets to keep the operation going while waiting for a return on their investments. If Mr. Shrontz could increase the return on equity for Boeing, it would increase the likelihood of Boeing’s continued success well into the future.
Moreover, the auditors had looked out the attitude or rationalisation of the company to justify the fraudulent action. The top management may behalf on their own interest but not the behalf of shareholders to maintain or raise the stock price of the company. In Cendant case, the CUC’s management allegedly inflated earnings by recording increasing revenue and reducing expense to meet expectation.
3. Analysis of the current organization and reporting structure by evaluating its strengths and weaknesses.
The aim of this essay is to study the function of external auditors in order to analyze why it is important to be independent. The primary mission of external auditors is to review and evaluate all the financial records of a company or corporation. They provide an objective opinion on the organization’s financial statement and effectiveness of the accounting polices in order to help management to make decisions. If the independence of the external auditors is impaired, the public will doubt the quality of professional auditing services, and the consequence would be very serious, just like the bankruptcy of Enron led to the disorganization of Arthur Andersen, once a giant accounting company in the world. In order to maintain and increase the independence of external auditors, some activities should be undertake to avoid the overdue market competition in professional accounting industry and enhance the supervising ability of the regulators. .What follow is a detailed analysis of the association between external auditors and companies.