BUS509: Assessing Corporate Governance in Oil and Nuclear Industries

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BUS509 STEWARDSHIP AND GOVERNANCE
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Contents
Week 3.............................................................................................................................................3
Assessment 1 (a)..............................................................................................................................3
1. Should the company keep its focus on its mission of ‘developing more oil and gas
reserves’?.....................................................................................................................................3
2. How would you make a case of the company to curb greenhouse gas emissions, increase
renewable energy research, and develop sources of alternative fuel?.........................................3
Week 5.............................................................................................................................................5
Assessment 1 (b)..............................................................................................................................5
1. How did the board member structure contribute to the failures?............................................5
2. How do you account for the discrepancies between the company’s alleged concerns for
corporate governance on its websites and catastrophic failure?..................................................5
3. What advice would you give to the chairman of TEPCO?......................................................5
Week 9.............................................................................................................................................7
Assessment 1 (c)..............................................................................................................................7
1). Given the situation that faced the company, do you think the board had an appropriate
structure and membership?..........................................................................................................7
2.) What changes, if any, would you recommend?......................................................................7
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Week 3
Assessment 1 (a)
1. Should the company keep its focus on its mission of ‘developing more oil and gas
reserves’?
According to the case study, a company named Exxon Mobil is having a mission to work on the
generation of more oil gas and reserves since the owner of the company wants to earn more
profit. This is right according to stewardship leadership theory since as per this director need to
focus and meet the demands or needs of shareholders (Burel, et. al., 2013). The director also has
to take care of the matter related to revenue and other assets for another person working in the
venture. But, if the company would follow its mission and may continue the work of developing
more oils and gas reserves, it would negatively impact on the environment by increasing the
level of global warming. This, as a result, creates an antagonistic implication on the overall
atmosphere and also on the financial health of the company. Therefore, it can be said that the
corporation ought not to work on their mission and vision.
2. How would you make a case of the company to curb greenhouse gas emissions, increase
renewable energy research, and develop sources of alternative fuel?
Exxon Mobil could control greenhouse gas emissions. This can be done through making an
effective strategy of increasing the research on renewable energy. In context to this, they can
investigate better plans for managing the emission of harmful gases like methane, carbon
dioxide, etc. Beside this, Exxon Mobil can do tie – up with the Statoil company as it can assist
them in preventing around 75 to 90 % of the CO2 emission in the environment (García‐
Rodríguez, et. al., 2013). In addition to this, the firm should think about the development of
other sources of alternative fuel like they can move towards renewable resources as it may
impact less on the environment. On the contrary, these actions cannot be implemented instantly
as no shareholder will support the same. But, the firm can work on the same plan in a slow and
steady manner.
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Comments on the reply to the student/ faculty
1843462124:
1). Hello, Niraj!!!, I have read your views and sharing my opinions on that. According to you,
the company should pursue its key aim of developing more and more resources reserve since
their motto is to bring revenue generation. But, this will greatly influence on the current level of
global warming as the emission of various gases would increase the same and causes several
issues for the whole world (Borowitzka & Moheimani, 2013). Beside this, it is the duty of a firm
to follow ethical rules and regulations along with the corporate social responsibility. Therefore,
Exxon Mobil should not continue the development of more oil and gas reserves.
2). On another side, I completely agree with your views of on the question of how a company
can make a curb to control the greenhouse gas emission (Ridjan, 2013). The company needs to
move towards other renewable energy investigation as this may hinder them in the attainment of
their target that is making a profit. Therefore, they cannot instantly act on this solution but can
support the government when they would take any initiative.
1943462401:
1). Hello Barsha Thapa !!!! I am completely satisfied by your view that is company need to
research more on developing that energy as this may not affect the environment on a larger scale.
2). I respect your opinion and also agree from that Exxon Mobil needs to peruse the leadership
role and try to focus on minimizing the emission of toxic fuels by considering renewable energy
(Tilman & Clark, 2014).
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Week 5
Assessment 1 (b)
1. How did the board member structure contribute to the failures?
According to the case study, the failure had caused huge financial destructions and also created
so many risks for the civilians. There was a great failure in the company with communication.
Because of this, they failed to discuss that tsunami can water the whole plant. The top three
executives at TEPCO were also not acting appropriately as they are neglecting their obligations
(Riles, 2013). Besides this, the TEPCO had also not designated any council at board level. Thus,
there is a need for better preparation for controlling the hazards. In this context, independent
directors have to focus on such disputes and continue regulation in check.
2. How do you account for the discrepancies between the company’s alleged concerns for
corporate governance on its websites and catastrophic failure?
Some of the indications are founded in the web site explanation of the corporate administration
of the firm. The chief was not revealing any difference between the administration and board
member. This was one of the worst nuclear disasters that are impacting on the whole world.
Additionally, the tradition and practices related to communication in TEPCO were in the
spotlight (Kingston, 2014). It is illustrating the interior mechanisms that would maintain the
social order which requires being actioned since, at the intense time demand, this can rapidly fail
during crisis conditions.
3. What advice would you give to the chairman of TEPCO?
The company needs to improve the existing level of communication and should start working on
handling or controlling hazardous situations. In addition to this, TEPCO should keep good
corporate governance and also work together for bringing innovational solutions for complex
issues.
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Comments on the reply to the student/faculty
Mithun Saha:
1). Hello Mithun Saha !!! I am supporting your views as I also think that the board structure of
TEPCO was not good as their negligence has resulted in such a great loss. The communication
level as well as corporate governance of the venture was very bad and that is why top
management and three executives did not interact.
2.) The opinion which you give upon the account for the discrepancies between the firm’s
assumed disquiets for corporate governance on its website and catastrophic failure is also correct
(Rheuben, 2014). There was a great issue with the administration and corporate governance of
the company. The culture and communication level of different practices of the corporation was
not in correct order. Because of these reasons, the failure has occurred which causes several
damages fiscally.
3.) The suggestions given by you are quite satisfactory. Actually, the chairman of the company
needs to upgrade the level of communication so that they can control any type of hazards in an
appropriate manner. Corporate governance also should robust in nature.
1943462728:
1). Hello Muhammad Tayyab Zafar !!! You are right, the accident happened due to the board
structure of the company. One of the reasons for mishap is the absence of independent board
member. The company also never actualized hazard control measures.
2). I agree with your views as corporate administration is considered as the main issue. The
chiefs also do not find out any differences between the board & administration.
3). The firm needs to develop innovative solutions to hard issues. The degree of communication
also requires to be improved so that each member of the company remains aware of any
important information.
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Week 9
Assessment 1 (c)
1). Given the situation that faced the company, do you think the board had an appropriate
structure and membership?
By examining the situations which are being faced by the corporation, it can be said that the
board is not having a suitable structure and membership. The model of business was relying on
leaseback and sale of the homes which is quite risky. The infrastructure of the company was
changing as they gain help from an agency like Blackstone in 2004. Here, again another risky
model was applied by them which assume that increment in demand and state-supported income.
Afterward in 2005, Blackstone had acquired NHP and integrated with Southern Cross and sold
out most of its homes by leasing the same to Southern Cross. Besides this, the Blackstone also
lifted Southern Cross on the London Stock Exchange into a bull market. Apart from this, most of
the voting shares i.e. 60 % were held by institutional investors. After the resignation of Philip
Scott in the year of 2008, the situation becomes inappropriate. In 2010, the company was
struggling with the cash flow, increased rents, the increment in the costing of food and energy,
reduction in the income of fee. These situations are highlighting that the membership and
structure of the firm were not appropriate in nature.
2.) What changes, if any, would you recommend?
The company need to make a constant structure and should not move towards different
approaches like leasing and integrating with any agency. The firm needs to build an effective
business strategy in order to recover from its past situations. They need to do proper negotiation
with the landlords and try to create a win-win situation where both of the parties would get
satisfied and no losses would occur in the future. They should develop a financial strategy and
work on the same in order to attain success in the future without relying or depending on any
other partner and organization.
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Reference
 García‐Rodríguez, F. J., García‐Rodríguez, J. L., Castilla‐Gutiérrez, C., & Major, S.
A. (2013). Corporate social responsibility of oil companies in developing countries:
From altruism to business strategy. Corporate Social Responsibility and
Environmental Management, 20(6), 371-384.
 Burel, F., Taccani, R., & Zuliani, N. (2013). Improving sustainability of maritime
transport through utilization of Liquefied Natural Gas (LNG) for
propulsion. Energy, 57, 412-420.
 Borowitzka, M. A., & Moheimani, N. R. (2013). Sustainable biofuels from
algae. Mitigation and Adaptation Strategies for Global Change, 18(1), 13-25.
 Tilman, D., & Clark, M. (2014). Global diets link environmental sustainability and
human health. Nature, 515(7528), 518.
 Ridjan, I., Mathiesen, B. V., Connolly, D., & Duić, N. (2013). The feasibility of
synthetic fuels in renewable energy systems. Energy, 57, 76-84.
 Höök, M., & Tang, X. (2013). Depletion of fossil fuels and anthropogenic climate
change—A review. Energy Policy, 52, 797-809.
 Gegg, P., Budd, L., & Ison, S. (2014). The market development of aviation biofuel:
Drivers and constraints. Journal of Air Transport Management, 39, 34-40.
 Riles, A. (2013). Market collaboration: Finance, culture, and ethnography after
neoliberalism. American Anthropologist, 115(4), 555-569.
 Kingston, J. (2014). Mismanaging risk and the Fukushima nuclear crisis. In Human
Security and Japan’s Triple Disaster(pp. 51-70). Routledge.
 Rheuben, J. (2014). Government liability for regulatory failure in the Fukushima
disaster: an Australian comparison. In Asia-Pacific Disaster Management (pp. 101-
118). Springer, Berlin, Heidelberg.
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