Corporate Governance: Transparency, Accountability, and Leadership

Corporate governance 1
Corporate governance
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Corporate governance 2
Introduction
Corporate governance is the way a board of directors who are voted in or appointed by
shareholders of a company helps to ensure there is transparency, fairness and accountability in
the company. The director’s role is to ensure there is a working relationship between all the
stakeholders of the company. The framework of a company’s governance ensures there are; good
ways of conflict resolution since conflicts may arise between stakeholders, clear guidelines on
contract between stakeholders and the company and ensures there is good and constant
communication between all the members (Boretey 2017, p.714). This essay focuses on corporate
governance issues.
Arguments in the article
Failure of the board is the first argument presented by Chris Schacht in one of the AGM’s. This
is because the executives have embezzled funds worth billions that belong to the shareholders.
This therefore has led to the struggles which were being witnessed at the current moment. An
overwhelming 32%, 68% 88% of the shareholders of the different companies mobilized up and
voted vehemently against the reports in the annual general meetings which were held in the
course of the year. The misuse of funds creped in from delayed payments to shareholders and the
royal commission allocated to the executives who get paid for what they do not deserve at any
moment (Aguilera, Judge and Terjesen 2018, p 93). The alleged services to be provided to
customers as it was the promise of the executives had failed. The four big banks had suffered
strikes due to the way executives are over-remunerated.
Fraud is the other of concerned that has been outlined. Some of the companies’ executives are
engaged in money laundering activities at the cost of the shareholders. Dr Henry was booked an

Corporate governance 3
unnecessary first-class trip to the United States of America by a former employee of the
company who has constantly been under investigation. This shows it was a privately organized
deal to loot from the shareholders unaware. He later gave a comment that he was unaware that he
braking the law at that particular point in time. There are also fraudsters in the sector who charge
the customers for services not rendered (McDonough 2012, p. 1). For instance car dealers act as
agents for lenders without possession of any financial services license. Flex-commission has
been another orthodox means in which some individuals in the sector suffocate customers with
irrelevant interest for personal gains. Selling of funeral policies have also been outlined as an
aspect that has contributed to customers purchasing insurance that is null and void.
Issues in corporate governance
Transparency
This is the ability of an organization to undertake clear business practices that can be audited and
all the dealings are traced effectively. A transparent company is able to provide clear information
which can be understood in a layman’s language since some of the stakeholders may lack great
academic qualifications to understand complicated information (Jia, Huang and Zhang 2019, p.
227). The financial performance of a transparent company is easily tracked down by any
individual who have special interest on the company. the leadership of a transparent organization
is usually secure and deals with its customers freely without fear.
Leadership
A corporate company should have independent leaders who will foresee the activities of the
company without any external interference. Politics, social class and economic capabilities of an