Corporate Governance and its Link to an Organization

Corporate Governance and
its link to an organization

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
1.1 Define Corporate Governance and its link to an organization..............................................4
1.2 Identify the general governance structure of an organization...............................................4
1.3 Assess the role of the governing body to direct and control an organization........................5
1.4 Distinguish the role of management and the governing body...............................................6
1.5 Describe how an organization can achieve good governance...............................................7
TASK 2............................................................................................................................................8
2.1 Identify different corporate governance codes to achieve good governance at the senior
management level........................................................................................................................8
2.2 Describe the similarities and differences of various theories affecting corporate governance
development.................................................................................................................................9
2.3 Identify ways to minimize conflicts of interest...................................................................11
2.4 Identify how to develop transparency accountability direction and control in the system
and processes of the organization..............................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Corporate governance refers to the system of rules, process and practices by which an
organisation is directed and controlled. This fundamentally involves balancing the interests of a
many stakeholders of a company. These are shareholders, customers, senior management
executives, financiers, community, government and suppliers. Since corporate governance also
gives the framework for accomplishing objectives of the company. In simple word, corporate
governance introduces to the effective way a corporation is governed. It is also introduces as a
technique by which firms are managed and directed. It means executing the organisation as per
the desires of the stakeholders. It mainly conducted or organised by the board of director and
also the concerned committees for the benefits of stakeholders within an organisation. There are
different benefits of corporate governance such as lowers the capital cost, positive impact on the
share price, ensures corporate success and economic growth, helps in brand formation and
development etc. All these are considered major advantages of corporate governance that helps
business organisation by improving its growth and success at national as well as international
marketplace (Bouchareb and Kouki, 2019). Along with this, there are different principles of
corporate governance including lay solid foundations for management and oversight, structure
the board to add value, promote ethical and responsible decision-making, safeguard integrity in
financial reporting, make timely and balanced disclosure, respect the rights of shareholders,
recognise and manage risk, encourage enhanced performance and many other. All these are main
principles that will help company by improving its financial condition.
For this project, Marks and Spencer is a chosen British multinational organisation that
specialise in selling of clothing, food products and home products, mostly of its own label.
Company was founded in 1884 by Michael Marks, Thomas Spencer and headquartered in
London, UK, England. In M&S, the Board's objective is to develop a sustainable business via
consistent, profitable development and to ensure that business act responsibly within meeting.
Accountability to shareholders and wider stakeholders are the main part of corporate governance
of M&S. Main purpose of this project is to identify the concept of corporate governance of an
organisation.
This project divided into two tasks that include information regarding the corporate
governance. For completing Task 1, there is different information that will be included. These
are definition of corporate governance and its structure, role of governing bodies, role of

management etc. In order to complete Task 2, there is also various information that will be
completed. These are corporate governance codes, similarities and differences of various theories
affecting corporate governance development, ways to minimise conflicts of interest,
development of develop a transparency, accountability, direction and control in the system and
processes. All these are main information that will be required for completing this project
successfully and effectively.
TASK 1
1.1 Define Corporate Governance and its link to an organization
Corporate governance introduces to the practices, process and system of rules by which
firms are governed and managed. In this way, corporate governance model used by an
organisation is the distribution of rights as well as responsibilities by all stakeholders in the
company. It deals with identifying the ways, in order to take effective and appropriate decision.
It provides complete responsibility and ultimate authority to the Board of director. It ensures
transparency which makes sure balanced and strong economic development (Das, 2019).
M&S operates around 1000 stores within the United Kingdom and over 400 within global
marketplace. Company operate clothing, food and home product and other retail enterprise using
the own brand of M&S. Company emphasised on delivering great and effective value for money.
Company believes that effective governance is accomplished through collaboration and
leadership. The work of board of director should enhance, support and compliment the work of
the executive. In order to working together, company organise robust interrogation of actions and
plan, make sure high quality decision making within entire areas of performance, accountability,
responsibility and strategy.
1.2 Identify the general governance structure of an organization
Corporate governance is the effective structure of process, practices and rules used to
manage and direct an organisation. Board of director of company is the primary and essential
force influencing corporate governance. In this structure, board of director represents or shows
the membership of the company. The board sets within place procedures, values, policies and
long term planning to attain the business objectives successfully (El-Bassiouny and El-
Bassiouny, 2019). Governance frameworks structure as well as delineate power and also
governing or management roles within an enterprise. They also set procedures, rules and many