Corporate Governance: Financial Responsibility, Ethical Issues, Suitability Issues, Stakeholder Theory

This article discusses the concept of corporate governance and its importance in organizations. It covers financial responsibility, ethical issues, suitability issues, and stakeholder theory in the context of Tesla. The article provides recommendations for the organization to improve its corporate governance practices.

Corporate Governance
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAINBODY....................................................................................................................................3
Financial responsibility...............................................................................................................3
Ethical issues...............................................................................................................................4
Suitability issues..........................................................................................................................5
Stakeholder theory......................................................................................................................5
Evaluation and recommendation.................................................................................................6
Mind map....................................................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
The corporate governance refers to the combination of various elements such as rules,
processes as well as law by which the organizations operate, regulate and are controlled. The
concept of corporate governance consists of internal and external factor that affect the interest of
an organizations stakeholders that include customers, suppliers along with government regulators
and management.
TO: Tesla@xyz
SENDER: xyz
SUBJECT: Corporate governance issues
MAINBODY
Financial responsibility.
Financial responsibility refers tot he overall process of managing finance as well as
assents of the business in an productive manner with the best interest of stakeholder within an
organization (Correa-Garcia, Garcia-Benau and Garcia-Meca., 2020). In context to TESLA, it is
crucial for the business to be financially responsible in order to keep its stakeholder have a
positive attitude towards the company. In addition to this, it is important the the organization
allocate its financial funds in a structured and systematic manner in order to ensure that the
organization does not face any loses. Given below are factors how TESLA fulfils its financial
responsibility:
Developing cash flow statement:
The organization proves it various stakeholders with a cash flow statements that allows
them to evaluate the finance of the organization. Through this the stakeholders are able to
evaluate the financial position of the business in the market and take suitable decisions.
Projecting profits:
The business provides its stakeholders with its profit projections based on various factors
in order to inform them about the potential profits that the organization can accomplish. This
helps the stakeholder to evaluate the data and determine if the organization is financial sound.
Moreover, this helps TESLA to ensure that all its stakeholder are aware to the financial position
of the organization.
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Ethical issues.
Ethical issues within a business refer to the situation where a moral conflict arises and
requires to be addressed. It can also be said that it is an occasion where the moral standards are
questioned. Moreover, an organization must focus on avoiding ethical issues within its operation
in order to keep the stakeholders such as employees and customers satisfied (Jacoby et. al., 2019)
In context to TESLA, it is important for the business to maintain a high level of ethical standards
within the organization and its operations. This allows the business to ensure that all moral codes
are implemented on and help in developing positive relations with its various stakeholder in the
market. In addition to this, implementing all ethical codes allows the business to develop an
enhance brand image in the market as well (Veselovsky et. al., 2018). Given below are principles
that TESLA follows in order to negate ethical issues within the organization:
Integrity:
The organization pays emphasis on ensuring that it maintains a high level of integrity in
order to ensure that is is able to prove a positive working environment to its employees as well as
maintain a high level of standard when providing products and service to its customers.
Fairness:
The organization also focuses upon the aspect of fairness order to prove equal
opportunity to all its stakeholders and avoid the element of being bias. This helps the business to
ensure that it is able to provide equal opportunity to its employees'.
Suitability issues.
It refers to the issues that are developed due to the use of production techniques that are
harmful for the surrounding environment. It is crucial for a bushiness to perform sustainable
practice in order to have a positive relation with its stakeholders. In context to TESLA, the
organization pays high level of focus on substantially issues in order to have a positive impact on
the surrounding environment (Chen, Dai and Na., 2019). In addition to this, it allows the
business to ensure that it is able to develop a a positive brand image in the market that positively
impacts its various stakeholders. The organization is focuses on using sustainable energy within
its various business operations as well as renewable energy. This allows the business to ensure
that the stakeholder are aligned with its sustainable goals and helps the business to have a
positive attitude in the market. Furthermore, through its substantially operations the organization
is able to have a positive impact on the customers of the organization as the current trend in the
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market is based on organization that focus on their sustainable issues and they can be negated in
an innovate as well as creative manner.
Stakeholder theory.
This theory is a crucial tool for an organization as it allows it to evaluate its various
stakeholders within the organization. It allows a business to evaluate as well as prioritize its
stakeholders and analyses of how various factors impact them. In context to TESLA, the
stakeholder analysis will allow the organization to evaluate its stakeholder on the bases of the
power as well as interest in the projects (Sahut, Dana and Teulon., 2021). This will help the
organization to prioritize its stakeholders and meet their demands in an structured manner. Given
below is the stakeholder analysis of the organization:
Meet their demands:
These stakeholder have high level of power hut less interest in the project of the
organization. In context to TESLA, the stakeholders that come in this part of the matrix are its
customers, regulators as well as sponsor that have high level of power but low level of interest in
the organization.
Key player:
The key player stakeholder of the organization have high level of power as well as
interest in the projects of the organization. In context to TESLA, the key payers of the
organization consists of its executive as well as investors of the business. They have high level of
power as well as interest in the business operations.
Least important:
These stakeholder of the organization has low level of power as well as interest in the
projects of the organization. In context to TESLA, the helps-desk as well as system admin of the
organisation are the lest import stakeholder for the organization as they have low level of power
as well as interest in the projects of the business (Yoshikawa, Nippa and Chua., 2021).
Show consideration:
These stakeholders of the organization have low level of power but have high level of
interest in the project of the organization, In context to TESLA, the suppliers as well as
developers are stakeholder that need to be considered by the organization as they have low
power within the organization but have high level of interest.
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Evaluation and recommendation.
From the above report it is recommend that the organization can focus on expanding its
ethical codes in order to enhance its ability to maintain fairness within the organization. In
addition to this, the business can focus on establishing a structured as well as systematic method
of providing financial information to all its stakeholders which will allow them to evaluate the
data and take necessary decisions in an effective manner (Lukason and Vissak., 2020).
Mind map.
The concept of a mind map involves a centralized theme and thinking of new and related
ideas that will radiate out from the centre. It focuses on key ideas and is connected among
themselves (Pillai. and Al-Malkawi., 2018). In context to TESLA, the mid map will allow
the organization to visualize the factors facts that impact is corporate governance and how
they function. Given below is the mid map of TESLA’s Corporate governance:
Financial responsibility:
Investment and protection:
The organization has to focus on providing its stakeholder with its invest as well as
protection of the financial resource. This is crucial as it allows the business to ensure that it is
fulfilling its financial responsibility of keeping the finances of the organization secure through
sound investment opportunities as well as keeping it protected in order to be utilized in
unforeseen situations. In addition to this, the organization is able to ensure that it is able to
inform its stakeholder about the allocation of its financial resource.
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Corporate governance
Financial responsibility Ethical issues Sustainability issues
Cash flow statement Integrity Renewable energyProfit projection Fairness
Investment and
protection Annual spending Law abiding Accountability Solar energy

Annual spending:
Through annual spending report the organization can effectively fulfil its financial
responsibility against its vital stakeholders. This will help the business to enhance its corporate
governance in an structured as well as systematic manner. In addition to this it will helps the
organization to proves necessary information related to its finances to their stakeholders. This
will help the business to develop a transparency within its finance's and develop high level of
trust among its stakeholders improve their relations with the organization (Dao., 2020).
Moreover, the business will be bale to develop a positive image in the market through their
reposts.
Ethical issues:
Law abiding:
This is one of the most crucial aspects of the ethical issues in corporate governance of the
organization. It is necessary for the business to pay emphasis on being law abiding in order to
ensure that all its stakeholders have a positive attitude relative to the operations of the business.
In addition to this, it will allows TESLA to ensure that all its operations are aligned with the set
law's and provide its stakeholder with high level of trust within the organization. In addition to
this, it will help the business to have an enhanced image in the market.
Accountability:
In order to have high level of trust the organization will have to ensure that it have an
optimal level of accountability relative to its stakeholder. This is vital as all the operations of the
business function on the aspect of accountability and ensure that the business has the required
support form its stakeholders. In addition to this, with the aspect of accountability the business
can improve upon its factor and ethical code of trust. This will allow the business to ensure that it
has positive relations with its various stakeholder and maintaining high level of productivity in
the organization.
Sustainability issues:
Solar energy:
In order to focus upon the sustainability issues the organization is focused on utilization
of renewable energy resource in order to have a positive impact on the surrounding environment.
In addition to this, it allows the business to develop a positive relation with its stakeholder as the
current market trend is based on enhancing sustainability within organization operations. This is
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vital for the stakeholder as it helps in reduction of operation cost which leads to decreased price
of products and service. Moreover, through the utilization of renewable energy such as solar
energy the organization is able to build a positive brand image in the market which benefits its
stakeholders. Furthermore, the business is also able to ensure that it is able to develop plans
based on long term goals as well as objectives.
CONCLUSION
From the above report it can be concluded, that it is crucial for an organization to have
effective corporate governance within it operations in order to ensure high level of performance
as well as productivity. In addition to this, it allows the business to have positive relation with its
various stakeholder by being financially responsible as well as following set ethical codes.
Moreover, the business can improve upon their suitability issues In a structured manner ensuring
the business is able to develop a positive image in the market and benefit its stakeholders.
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REFERENCES
Books & Journals:
Chen, X., Dai, Q. and Na, C., 2019. The value of enterprise information systems under different
corporate governance aspects. Information Technology and Management, 20(4), pp.223-
247.
Correa-Garcia, J. A., Garcia-Benau, M. A. and Garcia-Meca, E., 2020. Corporate governance
and its implications for sustainability reporting quality in Latin American business
groups. Journal of Cleaner Production, 260, p.121142.
Dao, B., 2020. A meta-analysis of corporate governance and firm performance. Journal of
Governance and Regulation, 9(1).
Jacoby et. al., 2019. Corporate governance, external control, and environmental information
transparency: Evidence from emerging markets. Journal of International Financial
Markets, Institutions and Money, 58, pp.269-283.
Lukason, O. and Vissak, T., 2020. Export behavior and corporate governance. Review of
International Business and Strategy.
Pillai, R. and Al-Malkawi, H.A.N., 2018. On the relationship between corporate governance and
firm performance: Evidence from GCC countries. Research in International Business and
Finance, 44, pp.394-410.
Sahut, J. M., Dana, L. P. and Teulon, F., 2021. Corporate governance and financing of young
technological firms: A review & introduction. Technological Forecasting and Social
Change, 163, p.120425.
Veselovsky et. al., 2018. System approach to achieving new quality of corporate governance in
the context of innovation development. Quality-Access to Success, 19(163).
Yoshikawa, T., Nippa, M. and Chua, G., 2021. Global shift towards stakeholder-oriented
corporate governance? Evidence from the scholarly literature and future research
opportunities. Multinational Business Review.
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