Corporate Governance Assignment Solved - (Doc)
Added on 2020-03-16
12 Pages3026 Words85 Views
Running head: CORPORATE GOVERNANCE1CORPORATE GOVERNANCE OF A COMPANYNameInstitutional Affiliation
CORPORATE GOVERNANCE2INTRODUCTIONAccording to Cadbury Committee, 1992 corporate governance can be defined as the system by which companies are controlled and directed. More categorically it is the framework for balancing the interest of various stakeholders such as the management, board of directors andshareholders.Modern discussions of corporate governance explain the principles raised in three documents released since 1990: The Sarbanes-Oxley Act of 2002 (The US, 2002), the Principles of Corporate Governance (OECD, 1999, 2004 and 2015) and the Cadbury Report (The UK, 1992). The last two principles present the general principles around which businesses are required to operate to enhance good governance.Abu Dhabi Ship Building’s (“ADSB” Company) is one of the company in UAE that has embraced corporate governance. The company recognizes the following pillars for good corporate governance; transparency, financial control, accountability, and disclosure. The corporate governance principles states the following;Corporate governance includes a set of relationships between various company stakeholders that is company’s management, its shareholders, its board and other stakeholders. Secondly, corporate governance also provides the framework through which the goals of the company are set and the means of attaining those objectives and performance measurement. (Marc, 2012)While the conventional definition of corporate governance and acknowledges the existence and importance of 'other stakeholders' they still focus on the traditional debate on the relationship between disconnected owners (shareholders) and often self-serving managers. Indeed it has been said, rather ponderously, that corporate governance consists of two elements:
CORPORATE GOVERNANCE3The two basic elements of corporate governance involve; the long-term relationship which has todeal information transfer through communications between management and investors , also ensure incentives for managers as well as dealing with checks and balances. The second element is the transactional relationship which deals with disclosure and authority.Additionally, Corporate Governance involves the interaction between various participantsin shaping corporation’s performance and ensuring a healthy relationship between the owners and the managers in an organization. This is done where the owner compares the individual’s actual performance with the standard performance. (Greg, 2004).Corporate Governance gives confidence to the financiers of getting a fair return on their investment. Corporate Governance shows clearly the difference between the owners and the managers. In this case, the managers are the deciding authority. In current corporations, the functions of owners and managers should be clearly defined. (Shleifer, Andrei, Robert, & Vishny, 2008).Corporate Governance helps in effective strategic decisions. It outlines the ultimate authority and complete responsibility to the Board of Directors. It also helps in today’s changing market trends as well as enhancing globalization and value addition to the stakeholders. (Reinhard & Tyrell, 1997).EXECUTIVE SUMMARYBoard of Directors Their basic role is to provide effective and efficient governance over the affairs of the company for the benefits of all stakeholders. In all activities undertaken by the Board, the Directors exercise their sound business judgment in what they reasonably believe to be in the best interests of the company and to comply with relevant laws and regulations as well as best
CORPORATE GOVERNANCE4company practices. Directors rely on the ethical concepts of honesty and integrity of the company’s senior executives and its auditors and external advisors so as to discharge their managerial obligations effectively. (Greg, 2004).The board of ADSB Company has an effective and well-informed system that fully complies with the Code’s requirement of Board composition in terms of the mix of non-executive and independent directors. The Board work in collaboration with the Sub-Committees of the Board with well-defined charters. The Company is governed by the relevant document of articles of association. This document clearly specifies the roles and responsibilities of the board,its members, and the executive. This is guided by strong corporate principles and standards.The Board comprises of nine directors as provided in the articles of association of the company. These directors are both non-executive and independent. Six of the directors are appointed by the resolution of the executive council of the Emirate of Abu Dhabi. This ensures good corporate governance. The other directors are appointed by the general assembly of the shareholders. However, unfortunately, there is no female director on the company board.Some of the responsibilities of the board as per the principles of corporate governance include;Uphold the ethical standards of good faith, due diligence and care in the interest of all stakeholders.Establish a corporate strategy guide outlining the company objectives, major plans of action, risk management strategy capital plans and annual budgets. Monitor the success of the set plans.Arrange for remuneration of key executive and board members with the longer-term interests of the company and its shareholders.
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Corporate Governance and Corporate Social Responsibility: A Case Study of British Petroleumlg...
|8
|1708
|101
Corporate Governance and Companies Improvementlg...
|10
|2522
|451
Corporate Law: Assignmentlg...
|11
|2506
|33
Leading and Managing Organisational Resources: Corporate Governance and Sustainable Leadershiplg...
|10
|3443
|169
Corporate Governance Organization Law Information 2022lg...
|11
|2235
|29
Comparative and contrast the approach taken to corporate governance regulation in the UK and the USA and external auditor role in relation to corporate governance regulationslg...
|12
|4065
|418