Report on Corporate Governance, Risk, and Remuneration: Maxwell Comm.

This report provides a comprehensive analysis of the corporate governance practices of Maxwell Communication. It begins with a discussion of agency, stakeholder, and stewardship theories, evaluating their strengths and weaknesses and identifying the best fit for Maxwell Communication. The report then examines the company's governance structure, including the roles of various boards and committees. A critical evaluation of the risk management policy is presented, including its pros and cons. The report also assesses the extent to which Maxwell Communication fulfilled legal requirements based on Turnbull reports, particularly in risk management and health and safety standards, offering recommendations for improvement. Finally, the report discusses the remuneration strategy of directors, considering performance and pay, and explores aspects like consistent performance rewards, performance-based compensation, competitive remuneration, and transparency. The report provides a detailed overview of the content.

COMPANY REPORT
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Table of contents
Introduction......................................................................................................................................3
1. Discussing theories along with the strengths and weaknesses. Also pointing out the best theory
for Maxwell communication with justification...............................................................................3
Agency theory:.............................................................................................................................3
Strengths:..................................................................................................................................3
Weakness:.................................................................................................................................3
Stakeholder theory:......................................................................................................................4
Strengths:..................................................................................................................................4
Weaknesses:.............................................................................................................................4
Stewardship theory:......................................................................................................................4
Strength:...................................................................................................................................5
Weaknesses:.............................................................................................................................5
2. Governance structure of Maxwell communications....................................................................5
Critical Evaluation of the Risk Management Policy.......................................................................6
Pros and Cons of the Risk Management Policy...............................................................................6
3. Discussing the extent fulfilment of legal requirements based on Turnbull reports and providing
recommendations.............................................................................................................................7
1. Risk management –..................................................................................................................7
2. Health and safety standards-....................................................................................................8
4. Discussing remuneration strategy of directors with reference to performance and pay..............8
1. Consistent performance reward-..............................................................................................8
2. Compensation based on performance –...................................................................................9
3. Total competitive remuneration –............................................................................................9
4. Transparency and simplicity –.................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................11
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Introduction
Corporate governance is considered as the main role in firm drive of the performance of the
company. The way on which corporation policies are governed for proper managing of the
corporation can be termed as corporate governance. Corporate governance intended mostly only
to increase accountability and be ready for all kind of massive disasters, which can occur in an
organisation. Every company or organisation needs a good process for proper running of the
organisation by implementation of corporate governance in an organisation. Corporate
governance is not only just a structure rather it also consist of various obligations and duties,
which are responsible for proper control and correct direction of any corporation.
1. Discussing theories along with the strengths and weaknesses. Also pointing out the best
theory for Maxwell communication with justification
Agency theory:
Agency can be considered as a contract in which either one agent or more are involved who are
engaged with other agent in order to perform any particular service or task and on behalf of them
involves any decision-making authority. As illustrated by Allen et al. (2017, p.14) Agency
theory simply elaborates about the best way to organize where one team determines the task
while the other team performs the given task. In this theory, principal hires agent to perform the
task or the task that a principal are not able to perform.
Strengths:
Agency theory offers reliable explanation in case of obedience as it easily helps to explain the
reality of life situation and thereby, following all orders from authority (Bair and Palpacuer,
2015, p.15). Agency theory is also useful during exercises of training of people who can be made
aware of agent so that the responsibility can be taken of their own actions.
Weakness:
Agency theory has a weakness as it is an anti social and the agency theory can be negatively
result in manipulation of agentic state which means knowledge can be used to perform negative
tasks (Goh and Gupta, 2016, p.384). Agency theory has also a weakness on considering its
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ethical implications, which means removal of personal responsibilities especially from who
commit to perform even under pressure and thus resulting on an excuse of individuals as if they
are simply following the orders.
Stakeholder theory:
Stakeholder theory states that any organisation or corporation owes responsibility to wider the
group of stakeholders. As explained by Han et al. (2015, p.417) A stakeholder can be termed as
any group or person that can be affected or affected by the nature of actions of the business.
Stakeholder includes employees, suppliers, customers, creditors and even the competitors.
Stakeholder theory is an important part of corporate governance, in which it understands the
various responsibilities of any organisation or corporation in today's world, whether they may be
economical, legal, philanthropic or even ethical.
Strengths:
Large number of key benefits is assured on including stakeholder theory in various processes of
decision-making. Stakeholders have different point of view in any kind of issues and even
stakeholders guide to assist with decisions or projects (Ionescu et al. 2016, p.118). Involving
stakeholder theory not only builds up the trust that ultimately can lead to higher consequences
regarding project or report of final decision.
Weaknesses:
Stakeholder theory has a weakness that it does not provide normative identifying foundation,
which can also be asserted by stakeholder of the companies. Stakeholder theory is unable to
explain its definition for few animals product based companies as animals are considered as
stakeholders according to the theory, which is meaningless without having any direct
relationship with the company.
Stewardship theory:
Stewardship theory is mainly helpful in order to contrast with two popular governance styles that
is stakeholder theory as well as agency theory. According to Jianxiang, (2014, p.18) Stewardship
theory has a single objective and that is to achieve shareholder satisfaction. Stewardship theory
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can be termed as having only one leader who creates a single channel for business
communication that business need to shareholder and shareholders need to business.
Strength:
The main strength of stewardship theory is that it directly focuses on the fact of satisfying the
shareholders who plays a very important role in corporate governance. On satisfying the
shareholders not only increases the business future of the company but it also helps in large
investment for the business as this theory results in increase in shareholders.
Weaknesses:
The only weakness of stewardship theory is that this theory results in increase in pressure of the
owner as it has only one leader who creates a single channel for communication (Klettner et al.
2014, p.152).
As per all theories discussed above, the best theory that suits for Maxwell communication is
stewardship theory because this theory will directly focus on requirement of shareholders and
thus, can finally result in increase investment, which can improve the business performance of
Maxwell communications.
2. Governance structure of Maxwell communications
One of the prestigious worldwide media UK based company is Maxwell Communications. It was
established on 1964 and act as UK based corporation of printing then. The whole of Maxwell
enterprise can be classified into company that are listed publicly and the companies that of
private background. According to Matyas and Pelling (2015, p.228) the company that are listed
publicly are Mirror company group and Maxwell communications, the private group of company
are called Robert Maxwell group of companies. The governance of Robert Maxwell group of
companies evaluated and findings say that monitoring of shareholders, and initiatives of different
managerial arenas help in investments for making profits. Governance that functions externally
follows law and regulations .Finance suppliers are cooperated by market. The governance of
Robert Maxwell group of companies mainly aims that protection of investors are primarily
guaranteed. Poor performance of companies is identified and it is found that the role of takeovers
is of prime importance. The governance regulations of the Maxwell Communications also cover
certain basic policies, and proper planning for meeting the organisation motives. Governance
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structures also forms a interrelationship between board of committees and the employees
involved with the organisation. The board of governance of Maxwell Communications mainly of
four types, which are Board of policy, that deals with management body of the organisation. The
Board, which deals with governance of policies that emphasise on development of policies. The
Board of Works functions on the administrative front of the organisation along with management
of finances and proper planning of programs. The Board of Collection acts as a single unit that
operates from administrative front.
Critical Evaluation of the Risk Management Policy
The risk management policy critically evaluates the degree of affirmative solutions that any
management can implement in its working structure. Filatova (2014, p.229) stated that the risk
analysis involves the proper planning and activities and resolves the investment plans. The main
analysis that the risk management considers in its working environment involves the analysis of
the situation and the proper plan for the strategic solutions that can be rendered in the specific
purpose.
The analysis also includes the problem action plan for the Maxwell Communication that matches
with the company objectives in the specific decisions. The evaluation of the planning involves
the specific low investment risks and in the business environment. The overall possible changes
that the risk management requires cause for the proper reviewing of the plans. The management
also considers the critical analysis and the evaluation of the stage wise specialized operational
requirements. It also includes the evaluation of the faulty activities that leads the specific success
for the requisite purpose of the risk management purpose.
Pros and Cons of the Risk Management Policy
Rambocas et al. (2015, p.128). The management policy requires the proper analysis that includes
the different requirements with the extensive detailing of the strategic decisions. The benefits
that the risk management policy renders involve:
Ø The risk management involves the compliance with the strategic rules and regulations and the
different beneficiary requirements for the organizational analysis.
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Ø The risk management analysis also includes the identification of the system and provides the
capable solutions to withstand the specific problems and adverse conditions and minimizations
of risks.
Ø The potential benefit of the risk management involves the elimination of the chances of the
losses that can arise in the business processing and awareness of risks.
Ø The provision for the structuring of the strong framework for the market analysis and includes
the effective improvement of the outcomes.
The disadvantages risk management policy in the business policies includes the purpose of the
proper analysis of the business requirements that consider:
Ø The risks management proposals include the complex calculations of the different
management requirements and involve arduous purposes.
Ø The mismanagement of the losses can cause extensive ambiguity in operations and
dependence of the external entities.
Ø The proposal becomes difficult for implementation and threat the performance of the
organization.
All these factors require critical analysis of the risk management policy for better advantages in
operational requirements.
3. Discussing the extent fulfilment of legal requirements based on Turnbull reports and
providing recommendations
Legal requirements based on Turnbull reports are as follows:
1. Risk management –
As commented by Nam and Heshmati (2016, p.32), Guidance for internal control of directors has
to be updated no matter whether it is implemented with guidance by replacing the concern of
liquidity risk. The section of risk management was last updated on 2010 as per UK Corporate
governance. Economic developments as well as failures based on risk management have resulted
in large amount of attention in pay scale of board in judging company’s approach from risk. As
mentioned in the reports of turnbull, Maxwell Company has improper risk management which
was one of the main reason responsible for the downfall and its bankruptcy (News.bbc.co.uk,
1991).
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2. Health and safety standards-
For many companies, health and safety mainly is considered as a corporate governance problem
and board members of the respective company has responsibility to maintain and avail proper
safety and medicals for the employees. As argued by Shields et al. (2015, p.25) Turnbull
guidance on corporate governance on combined code has listed companies which has robust
systems not only just financial risks but also several risks related to environment, reputation for
business in market and health and safety. As per report of turnbull, Maxwell communication
corporation insufficient facility on the basis of health and safety for the employees, which turned
down the employees of the company against the company and made the company go through
huge amount of debt.
It can recommend for Maxwell communication that the company can mainly focus on the
demands of the shareholders, which can directly improve the overall performance of the
company. As per corporate governance, any company has direct impact of shareholders based on
the investment plans of the company and thus, plays a responsible role in business. With proper
strategy of implementation of plans for any rise in company’s performance becomes an effective
and efficient cause for an outcome of any company. Similarly, if proper implementation of plans
can be made in Maxwell communication can also help in proper upliftment of the company.
4. Discussing remuneration strategy of directors with reference to performance and pay
Remuneration strategy of directors based on performance and pay scale are as follows:
1. Consistent performance reward-
This part mainly focuses on the consistent performance delivery to the company and long-term
way, which is responsible for value creation for the shareholders of the company. Proper
alignment among the executive director's interest whereas the shareholders play a key role. For
example, David Shaffer and Jean-Pierre Anselmini (directors of Maxwell communication) can
implement the strategy of consistent performance reward in Maxwell Communication Company,
which can directly influence the performance of the company.
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2. Compensation based on performance –
components of reward offer a mixed balance in long term and short-term incentives, which are
applied by conditions of achieving the given targets. Performances like, operational margins, net
sales and net shareholder return are the basic keys for the grown of business which are aligned
with the value of the shareholder. For example, directors of Maxwell communication that is,
David Shaffer and Jean-Pierre Anselmini efficiently manage to provide incentives based on the
performance.
3. Total competitive remuneration –
Framing of reward levels in context of net competitive remuneration packages that is paid by
similar global comparators. In competition of same global companies who has the ability to
retain and recruit the better talent from each corner of world is critical to Maxwell
Communication Company. For example, Maxwell communication implemented this strategy as
it directly focussed on the dependency of shareholders.
4. Transparency and simplicity –
This strategy is regarding the transparency and simplicity of the committee of the company by
targeting clearly on the performance, which is clearly aligned in the company. The committee
can handle the company in well-planned way on this strategy as all the targets marked can be
easily achieved. With the help of this strategy, the committee of the company has an open point
of view to all the company mates of an organisation, which later on makes the committee more
trustworthy to the shareholders of the company. For example- the committee team of Maxwell
communication is simple and transparent to the shareholders, which reduce the drawbacks of the
company.
Conclusion
The proper analysis risk management plans include the differences in operational requirements
that should require the compliance with the Maxwell communications requirements. The critical
analysis considers the different requirement that is must for the operational stability and the
structural advantage of any organization. The analysis also projects the cause of the efficient risk
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management plans for stabilizing with the arduous conditions. Thus, it requires the purpose of
the proper risk management plan in any organization.
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News.bbc.co.uk (1991) Maxwell Business faces bankruptcy Available at:
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