Stewardship and Governance - Case Studies on Exxon Mobile, TEPCO and Corporations Act

This article presents case studies on Exxon Mobile, TEPCO and Corporations Act, discussing the importance of stewardship and governance in corporate decision-making and the impact of board structure on company performance.

Running head: CASE STUDY 0
STEWARDSHIP AND GOVERNENCE
STUDENT DETAILS:

CASE STUDY 1
Case study 1:
1. The case study is based on Exxon Mobile. The CEO of company said that according
to him, the company had to made focus on the mission to establish more oil and gas
reserve, and that oil and gas will stay primary fuel sources for periods to come. Many
shareholders did not agree. They argued that company’s importance on establishing
oil and gas as energy source exposed global environment and economical or financial
condition of the company. It is analysed that the company need to stick with its
mission and vision for developing sustainability in their business operation. The
company addresses the impacts of the rising greenhouse gas emission, which result to
propose changes of climate. After evaluating the case, it is suggested that the
company should continue to involve the related stakeholders in various sustainability
procedure for securing the surroundings. Thus, company should make focus on the
mission to establish more oil and gas reserves (Kallamu, 2015).
2. The corporations do not have ethics. It is required by the Board of company to be
morality of corporation. The directors are required to render the corporation with
ethical scope. For this, board is liable for making the substantial effects of the
approaches it makes. The board is also accountable to recognise the both long-term
effects and short-term effects of policies it accepts and for identifying the probable
results on the individuals and for admitting the obligations to be responsible.
It is a duty of board to make strategies of the company and identify the involved risk.
It is necessary to balance challenging claims of various stakeholders and develop
maintainable corporate social responsibility strategies, when fulfilling the
expectations of shareholders. As per the concepts of stewardship, leadership, and
corporate social responsibility (CSR), the motion of shareholder is correct that the

CASE STUDY 2
company is required to curb greenhouse gas emissions enhance renewable energy
research and establish the alternate fuel sources (Basco, 2014).
Case study 2:
1. The board of company was very large, managerial and missing any logic of self-
governing external directors. It is very difficult in various well-known corporations of
Japan. The government of Japan and world-wide organisational depositors like US
Calpers have been made efforts but they have not succeed to later the attitude in
boardroom, to where powers must exist in and who is required to be encouraged to the
board of company (Kallamu, 2016).
2. It was the corporation, which seemingly did not admit the importance of professional
corporate governance believing, however went over the motion to fulfil the
controllers, managers, and depositors of stock market.
3. After reading the case, it is recognised that the chairman has main role in appointing
the directors of the company. There may be great effect of the resignation from the
board on the conduct of Chairman or CEO of the company. The resignation of the
directors of the company creates the negative image of Chairman of company or CEO
of company. The main important thing to be taken as challenge is to know the
constitution of the board and process of behaviour of the directors. It is considered as
other corporate governance standard or model. It is analysed that supplanting the
board of company with majority of independent directors, is not good suggestion.
There is no such provision of practise of the independent directors; it operates
conflicting to various top managerial beliefs. The burden from organisational
depositors to leave the job might work; however, there must be replacement.
Otherwise, the accessing advices, consultation services, directions, guidance,
mentoring, reviewing, activities related to changing the behaviour, involvement and

CASE STUDY 3
understanding on further board might be the better ideas or suggestions for the
chairman of the TEPCO company (Çetinkaya, Agca & Ozutku, 2016).
Case study 3:
1. As per the Corporations Act, 2001, there are no prescribed maximum number limit of
the directors (Clarke, Thurstan & Yates, 2016). Mostly, states based associations
incorporation legislations do not recommend minimum number of member or
maximum number of member for the board of company. The minimum number of
board or maximum number of board for legal experts and other public sector
organisations are generally recommended in legislature or the regulations by which
the companies or authorities are created. Further, as per the provision of the
Corporations Act, 2001, the number of the non-executive members should be more
than executive members in company. It means there should be majority of non-
executive members. In this company, the board of company has six members
including four males and two females. The company has majority of non-executive
directors. According to these criteria, the board has appropriate body structure.
However, the board has only one independent non-executive director. It may affect
the independency of the company. Because as per the Corporations Act, 2001, there
should be at least two independent directors for smaller board (Bateman & Balmford,
2018). This structure may arise the question on the appropriateness of the board
structure of company. In the given situations, it is analysed that the board structure of
the company is not appropriate structure. Furthermore, it is the fiduciary duty of
director to act in good faith (Ljubojevic & Dasic, 2018). The person who is holding
the position in one company, cannot hold the position in same or other capacity in
other company. In this company, David Smith, Christopher Fisher and Nancy

CASE STUDY 4
Hollendoner hold the position in some other companies. In this way, they are not
eligible to be director in this company.
2. As per the above discussion, it is recommended to appoint one or more independent
director in the company to avoid the situation of interest confliction. It is also
recommended to ask the David Smith, Christopher Fisher and Nancy Hollendoner to
held the position in Blackstone only or in other company. if they wish to continue in
other company, then it is required to appoint more executive or non-executive
directors in appropriate balancing number (Nikhmah & Asrori, 2017).

CASE STUDY 5
References
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Kallamu, B. S. (2016). Nomination Commitee Attributes and Firm Performance: Evidence
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Kallamu, B. S. (2015). Ownership Structure, independent directors and firm
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Ljubojevic, G., & Dasic, G. (2018). Boards attributes and their implications on decision-
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Nikhmah, S., & Asrori, A. (2017). The Effect of Good Corporate Governence
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Çetinkaya, M., Agca, V., & Ozutku, H. (2016). Priorities for Corporate Social Responsibility
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Basco, R. (2014). Exploring the influence of the family upon firm performance: Does
strategic behaviour matter?. International Small Business Journal, 32(8), 967-995.