Corporate Governance: A Multi-Perspective Perspective
Added on 2020-03-16
17 Pages4626 Words394 Views
Leadership ManagementPolitical Science
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Running head: BUSINESS REPORT 1Business ReportStudent’s NameInstitution AffiliationDate
BUSINESS REPORT 2ContentsIntroduction......................................................................................................................................4The Issue in Context........................................................................................................................5Literature Review............................................................................................................................5Analysis of the Issue from Multiple Perspectives...........................................................................8Ethical Perspective.......................................................................................................................8Stakeholder Perspective...............................................................................................................9Sustainability Perspective..........................................................................................................11Conclusions....................................................................................................................................12Recommendations to Improve Corporate Governance..............................................................13References......................................................................................................................................15
BUSINESS REPORT 3Executive SummaryEvidence suggests that most corporations have failed as a result of the negligence of theirboards of directors. Even though research points out that the directors have the required qualifications to hold such executive positions, most of them have not been discharging their duties in line with the corporate rules and regulations. Some of the renowned companies whose failure has been blamed on the boards of directors include Enron, DuPont, and WorldCom. Investigations carried out by the Securities Exchange Commission (SEC) – after it received numerous complaints about Enron – revealed that Enron’s directors had flaunted the accounting rules. In some instances, companies have failed to set aside enough resources to meet their production activities since the directors have been using a lot of funds to cater for their compensation benefits. In other scenarios, the executives have been awarding themselves ‘pay performance booms’ without valid reasons. Additionally, it has been noted that some directors have been working in cahoots with corrupt employees to defraud their respective organizations. Therefore, it is necessary for the stakeholders – more so the investors – to demand accountabilityfrom the boards of directors to enhance corporate governance. Besides, the executives should formulate favorable regulations that govern the operations of a firm so as to uphold transparency at all times.
BUSINESS REPORT 4IntroductionCorporate governance refers to a stipulated set of guidelines and laid down procedures through which a corporation is governed through. It includes rules and regulations which dictate how decisions are achieved at in a corporation (ASX Corporate Governance Council, 2014). Corporate governance is anchored on striking a balance among the various components of a corporation, such as the shareholders, regulators, directors and other stakeholders, as well as outlining the rights of each stakeholder according to Al-Tawil (2016). Nevertheless, some of the stakeholders – more so the board of directors – have been violating these laws, hence, leading to the downfall of several corporations all over the globe. The board of directors is mandated to oversee the operations of a company to safeguard the interests of the shareholders (Martin, 2015). As a result, the Board is expected to hold regular meetings to review the performance of the organizations and chat the way forward. Some of the notable companies that have fallen as a result of violations of the company rules by their board of directors – for instance, the CEO’s – include Enron and DuPont. Sonnenfeld points out that most of the board of directors play a key role in the failure of a company by failing to act whenever they note something unusual has happened or making a hasty decision to fire a performing CEO without having enough evidence that he/she may have engaged unethical conduct (Sonnenfeld, 2015). In some cases, the Security Exchange Commission (SEC) has been forced to move in to try and save the shareholders from suffering immense losses. For example, in 2001, SEC decided to investigate the accounting practices at Enron after getting a lot of complaints from the shareholders (Forbes, 2013). Ultimately, various key stakeholders (the CEO and the Chief Financial Officer) were prosecuted for flaunting the accounting rules.
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