...METROPOLITAN COLLEGE OF NEW YOR | CORPORATE GOVERANCE | CHAPTER THREE | | ROLAND SAMPSON | | Corporate governance refers to the set of systems, principles and processes by which a company is governed. They provide the guidelines as to how the company can be directed or controlled such that it can fulfill its goals and objectives in a manner that adds to the value of the company and is also beneficial for all stakeholders in the long term. Stakeholders in this case would include everyone ranging from the board of directors, management, shareholders to customers, employees and society. The management of the company hence assumes the role of a trustee for all the others. Corporate governance is based on principles such as conducting the business with all integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions, complying with all the laws of the land, accountability and responsibility towards the stakeholders and commitment to conducting business in an ethical manner. Another point which is highlighted in the SEBI report on corporate governance is the need for those in control to be able to distinguish between what are personal and corporate funds while managing a company. Fundamentally, there is a level of confidence that is associated with a company that is known to have good corporate governance. The presence of an active group of independent directors on the board...
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...Introduction A rational control and payments between managers and the owners of firms always takes a crucial role in the corporate governance. The owners control, supervise and motivate managers or agents over the firms’ performance and payment. For managers or agents, in order to achieve more rewards, have to take great effort to run the firms. The firms have a valid system by means of this way. On the contrary, if the owners of the firms only concentrate on the profit and the managers or agents abuse the owners’, even the firms’ assets, as a result of it, the operation of market economy and the basis of the modern state wound be weakened, the real economy and financial sector is also facing a huge risk at the same time. This paper will take the famous industries in three different countries as the main explanation, which represents three different corporate governance modes. The first part is primarily introducing the shareholders monitoring mechanism which is used extensively in Germany and Japan. The firm’s internal structure and the compensation rewards system of Siemens and Toyota will reflect the advantage of the German and Japanese mode. The second part is talking about the market monitoring mode, which is widespread use around US and UK. And Enron will as a famous example for explaining the drawbacks of this mode. These two main modes of corporate governance widely used all over the world. The third part includes southeast countries’ family control mode and the internal...
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...degree of family ownership/control provides positive benefits to the family business and its shareholders. Family-owned firms face unique challenges. However, many failures of family-owned companies indicate that such firms also face a multitude of challenges which risk destroying shareholder value or even the business itself. Corporate governance measures lead to long-term success and keep peace in the family. Corporate governance measures at the family and business levels provide good solutions to family ownership challenges and often are indispensable to the long-term success of the family business nd peace in the controlling family, especially with succeeding generations. —a “…We have two options; there is no right or wrong decision, nor one that is better than the other. But whatever is to be done, will be definitive. There is no turning back. We can continue being a family business, like in my grandfather’s and father’s days, or become a professional company with a strong and clear capital market strategy.” —David Feffer, Suzano, Chairman of the Board, speaking to his relatives after his father’s death Practical Guide to Corporate Governance 121 Family Business Challenges Chapter 5 Governance Challenges for Family-Owned Businesses F amily-owned or controlled companies are the leading form of business organization in Latin American countries, even among large listed companies: one recent study from Brazil...
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...Corporate Governance and Legal Responsibility Melanie Green Law, Ethics, and Corporate Governance (LEG 500) August 8, 2012 Corporate Governance and Legal Responsibility Research Paper Dr. DoRight is the President of the “Universal Human Care Hospital” where he has a responsibility to oversee all departments with over 5,000 employees and over 20,000 patients at the medical facility. Dr. DoRight has discovered that some patients within the hospital has been dying as a result of illegal procedures by doctors and nurses, and negligent supervision and oversight on their part. When this issue was brought to Dr. DoRight’s attention during a few meetings, the President discussed the issue with his Regional Director Compliance Manager and Executive Committee in January 2009.The Regional Director Compliance Manager and Executive Committee explained to the President that the matter would be investigated and any issues would be reported immediately. Two years after the matter has been reported there still hasn’t been any results from the investigation and patients continue to pass away due to negligent activities. However, Dr. DoRight continues to win awards based on his leadership within the hospital and he holds the title of “2011 Medical Business Executive of the Year”. The hospitals performance and negligence has caused several damages within the institution. Employees and/or officials have not been properly fulfilling their duties as care providers resulting...
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...At the end of the nineteen century, Italy was still lagging behind in the industrial process compared to other European nations. One of the reasons for this slow industrial process was the lack of available capital at this important time in Italy's history. A direct result of this economic problem was the established of two banks,Banco Commerciale Italinna and Creditio Italinna,these banks were backed by German capital and management skills. From 1896 to 1914 Italy had intense industrial activity in the country. The banks provided the much needed capital and expertise and skills which resulted in the establishment of many companies like Breda(train engines) and Fiat(cars). The industrialization process became so big the banks were unable to keep up with this intense process. In 1887 government intervention was needed to rescue a large steel company(Teri) and its lenders from bankruptcy. This was the start of state involement in large companies in Italy. The credit depression forced the government to intervene on a much larger scale. The financial crisis led to the collapse of Italy's three main investment banks. With the state now financially involved with all these rescued companies they established an agency called (LRI) to manage the large portfolio of companies previously controlled by the three banks. Italy has still maintained a direct precence in the economy as the controlling shareholder of profit oriented firms. The state now became more actively involved in...
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...LEG500: Law, Ethnics and Corporate Governance 17 July 2011 1. Explain where an employee can reasonably expect to have privacy in the workplace. Reasonable expectation of privacy for an employee could require a balancing test as what the US District Court judge used in the 1996 case of Michael A. Smith v. The Pillsbury Company. The judge ruled in the defendants favor saying that Pillsbury’s “interest in preventing inappropriate and unprofessional comments or even illegal activity over the email system outweighed any privacy interest the employee may have in those (email) comments”,( Halbert 2011, p.72). In this case, it was more important for Pillsbury to know what communication was going out through its email system than it was to protect Mr. Smith’s privacy. Consequently, where an employee expects to have reasonable privacy depends on the employers’ own policy within the workplace. The policies need to be clear and easily accessible to the employee. Many US companies would have their policies posted on their internal websites where an employee can review them at anytime. The information normally spells-out that any use of company facilities or equipment garners the right for that employer to monitor it at any time. This could include their email system, voicemail system, company phone, company car, etc. To be honest, I think arguably the places where an employee can expect reasonable privacy are within a more enclosed ...
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...Application Paper #2 Improved Corporate Governance will improve Japan’s Earning Power Luis C. Mendoza Corporate Governance GB-6215(Online) Spring 2015 18 April 2015 Can improved Corporate Governance improve Japan’s earning power? Tradition and honor in Japan’s culture are very strongest traits which develop the foundations of daily lives and how corporations conduct business. A tradition in Japan is taking an all male work team, salesmen and clients to visit a bar/club after hours that are greeted by a “Hostess”. A “Hostess” is a woman who is paid to flirt with men. These visits are sometimes mandatory which corporations cover fully and label them as “entertainment expenses” (Smith, Japan Flirts with Goverance Reform, 2015). One of Japan’s biggest problems is poor corporate governance (Smith, Bloomberg View, 2015). This is an example and evidence that poor corporate governance to a degree is liable for the potential drought of business investments into Japan’s economy (Smith, Japan Flirts with Goverance Reform, 2015). This is an example of why Japan’s Prime Minister Shinzo Abe’s made a decision to develop and incorporate Abenomics in 2014. Japan, as a society with extreme high value to culture and respect, views and approaches corporate governance has been very different for the past few decades compared to the United States. Japan’s board members are typically internal corporate managers rather than independent directors. Independent directors are very uncommon...
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...Management Efficiency Senior Management FSIBL is functioning with a highly professional management team headed by the Managing Director Mr. A. A. M. Zakaria. Among other senior executives currently Two DMD, One Principal (Training Center), Two SEVP, six EVP, Seven SVP, Eleven VP, Nine FVP, fifteen SAVP, sixteen AVP and eighteen FAVP are discharging their services in progression of the banks business. Managing Director Mr. A. A. M. Zakaria, Managing Director of the bank is an eminent banking personality having long 33 years of experience in banking industry. After successful completion of his B.A. (Hons), M.A. in Economics from Dhaka University, Mr. A. A. M. Zakaria has started his banking career in 1977 as Senior Officer of Rupali Bank. Before the current responsibility, Mr. A. A. M. Zakaria was the Deputy Managing Director of Dutch-Bangla Bank Limited. In his multi-greeted banking service, Mr. A. A. M. Zakaria participated in many courses, training program and workshops on banking at home and abroad. Mr. A. A. M. Zakaria joined in FSIBL on 7th August 2005 as Managing Director. Top management of the bank is supported by human resource strength of aroung 1200 executives and officers. For smooth functioning of the Bank, following committees have been formed: Management committee (MANCOM) comprises of senior members of the management headed by Managing Director of the bank. Head of HRD is the member secretary of the committee and Head of IMRD, Head of IC&C including DMD are...
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...Table of Contents 1. TITLE PAGE 4 EXECUTIVE SUMMARY 6 3. INTRODUCTION: 6 4. CONTEXT OF THE COMPANY: 7 5. WHAT IS CORPORATE GOVERNANCE: 8 6. THE PURPOSE AND BENEFIT OF GOOD GOVERNANCE: 8 7. GUIDING PRINCIPLES OF GOOD GOVERANCE: 9 8. REVIEW OF REPUBLIC BANK LIMITED’S CORPORATE GOVERNANCE: 9 8.1 Organisation Structure: 10 8.2 Republic Bank Limited’s Core Values: 11 8.3 Republic Bank Limited’s Code of Conduct and Ethics: 12 8.4 Corporate Social Responsibility (CSR) in Republic Bank Limited: 12 8.5 Policies and Procedures in Republic Bank Limited: 13 9. CONCLUSION: 13 10. RECOMMENDATION: 14 -15 11. REFERENCES: 16 12. APPENDICES: 17 Appendix I 17 Appendix II 18 Appendix III 19 - 20 Appendix IV 21 - 22 Appendix V 23 TO: THE CHAIRMAN, REPUBLIC BANK LIMITED FROM: CONSULTANT DATE: 03RD MARCH, 2014 SUBJECT: IMPROVING CORPORATE GOVERANCE IN REPUBLIC BANK LIMITED 2. EXECUTIVE SUMMARY It has been established that Organisations need to have a Competitive Advantage to remain viable and profitable. In order to accomplish this, one (1) essential tool is good Corporate Governance. This paper first identifies what good Corporate Governance entails then reviews the Corporate Governance process of Republic Bank Limited (a local banking organisation) utilising the tools, concepts and theories of the governance process identified. Some recommendations have been made to further enhance what the bank currently practices. 3. INTRODUCTION: The extent...
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...Satyam Case Study The Satyam scandal is a case that details carelessness of fiduciary duties, total collapse of ethical standards, and a lack of corporate social responsibility. The corporate governance mechanisms at Satyam ultimately led to the downfall of the company. Two words can clearly explain this scam: greed and desire. The CEO of Satyam, Ramlinga Raju, exhibited greed that overshadowed the responsibility to meet fiduciary duties. To compound the issue, vital information was withheld from employees. Even if regulatory changes were implemented, the Raju brothers would have still committed this scam. 1. Raju felt the need to inflate numbers on the balance sheet to impress stakeholders, investors, analysts, and the stock market. The first sign of fraudulent activity began in April 1999, when the company stated that the company experienced a double-digit annual growth rate. The fraud became very prevalent when Satyam planned to acquire stake in Maytas Infrastructure Limited and in Maytas Properties. Ironically, both of these companies were real-estate firms that were owned by family members of Satyam’s founder. I inferred that Raju wanted to acquire these two firms on the balance sheet in order exaggerate their worth. On December 16th, 2008, the Satyam board, including five independent directors approved the proposal to buy stake in Maytas Infrastructure and Maytas Properties without any shareholder approval. Here lies another major problem. There were 5 independent...
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...Organizational Structure MGT 230 April 8, 2012 Dr. John Opinski Organizational Structure Organization and planning are an essential asset for organization’s to attain the highest level of efficiency and achieve success. Microsoft is an organization with a structure composed of a chief executive officer (CEO), who is Steve Ballmer, a board of directors, executives, and senior and technical leaders. Microsoft has grown since it was founded in1975 and is currently a worldwide leader in services and software (Microsoft, 2009). Microsoft has an efficient and productive organizational structure. This paper will show a comparison to other organizations to demonstrate the importance of an organizational structure and show similarity and also distinctness in structure. An evaluation of how organizational functions such as finance, marketing, operations, and human resources influence and determine the organizational structure of Microsoft is given. Additional examination of Microsoft defines the outcome of organizational functions to the organizational structure. Microsoft’s organizational design illustrates the best structure to achieve the organizations goals. Last, Microsoft’s organizational structure of management, functions, and design work together to achieve success. Companies need to have organization and levels of authority to function successfully. The first level of any company’s organizational function is employees. Employees are divided into different departments...
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...HealthSouth: Fraud, Greed & Corporate Governance Marilyn J. Bordeaux HCS 5339 Rachael Kehoe HealthSouth: Fraud, Greed & Corporate Governance During the 1990s, Richard M. Scrushy, the former CEO of HealthSouth Corporation, engineered many acquisitions of rehabilitation clinics, outpatient surgical care operators, nursing homes and other health care companies. In 2003, the Securities and Exchange Commission (SEC) accused the company and Scrushy of inflating earnings to the tune of $1.4 billion since 1999. In November 2003, a federal grand jury indicted Scrushy on 85 counts including conspiracy, securities fraud, money laundering and charges related to overstating HealthSouth’s earnings by nearly $3.0 billion. According to federal investigators, the company overstated earnings to meet analysts’ earning estimates, while hiding the accounting fraud from the auditors. However, questions were raised whether the auditors failed to find or simply overlooked the fraud at HealthSouth. Central to the investigation was the issue of what role Scrushy played in “cooking the books.” However, as the case unfolded, it highlighted many other issues such as: The role of Board of Directors in corporate governance; the role of the auditors; the effect of conflict of interest between an accounting firm and its consulting arm on auditing; whether the relationship between an investment bank and a company affects the quality of the bank’s research reports on the company; whether the executive...
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...Financial Management includes the following 5 functions * Financing function- raising capital to support firms operations and investment programs * Capital budget function- selecting the best projects in which to invest firm resources, based on a consideration of risks and return * Financial management function- managing firms interna; cash flows and its capital structure to minimize the financing costs and ensure that the firm can pay its obligations when due * Corporate goverance function- developing an ownership and corporate governance system for the firm that will ensure that managers act ethically and in the best interest of stakeholdes * Risk management function- managing the firms exposure to all types of risk Working capital management 1) Working capital management involves managing and financing the current assets and current liabilities of the firm. Primary focus of working capital management is managing inventories and receivables. a) Managing the firms cash conversion cycle- is the length of time between when the firm makes payments and when it receives cash inflows (1) Can be analyzed by using the flowing 3 periods (a) Inventory coversion period (b) Receivables collecton period (c) Payables deferral period i) Inventory coversion period- average time required to convert materials into finished goods and sell them. IVP= avg inventory/ COGS per day ii) Receivables...
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...“Good corporate Governance as a vital constituent of Corporate Social Responsibility” with reference to Indian MNCs Type: Literature review Name of Research Scholar: Santosh Basavaraj, Research Scholar, Anna University of Technology, Coimbatore. Research Supervisor: Dr.B.Rajasekaran, Principal, RKKR School of Management Studies Ettimanickampatty, Coimbatore Road, SALEM – 637 504 Contact Number & Email ID:997209785,santosh_bs2001@yahoo.com Purpose: This research paper aims at gaining an insight into the concepts of Corporate Governance and CSR which enables this researcher to generate new ideas on concepts under study. The central purpose of this research paper is to determine how companies Corporate Social Responsibility practices blended in Corporate Governance and to study integration of CSR with CG which enable future researchers to study how companies are able to sustain its Competitive edge with good CSR activities by considering some good practices followed in industry and their critical evaluations in recent events. This research sets the foundation for future study and refers literature to develop a new hypothesis in the concept of CSR. An additional objective of this research paper is to review the Literature on Corporate governance and studying the Juxtaposition of CG and ethical issues for better corporate social responsibility. Design/methodology/approach This is an exploratory research design and it is used to seek insight in general nature...
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...NON EXECUTIVE DIRECTORS A member of a company's board of directors who is not part of the executive team. A non-executive director (NED) typically does not engage in the day-to-day management of the organization, but is involved in policy making and planning exercises. In addition, non-executive directors' responsibilities include the monitoring of the executive directors, and to act in the interest of any stakeholders. Also called external director, independent director and outside director. ROLE OF NON EXECUTIVE DIRECTORS * Provide objective and independent advice to the Board to enable it to make better decisions in the interest of all shareholders * Bring a genuine independent perspective to enhance decision making * Provide value added input to strategy and strategic development * Act in the best interests of the company as a whole rather than any one particular group of shareholders * Assist in carrying out the duties of the Board, such as: * reviewing, approving and on-going monitoring of the strategic plan * reviewing organizational capability in relation to stated objectives * reviewing financial performance against targets * raising capital * reviewing any major changes in the company, such as financial and organization structure * providing advice on major investments/divestments to be made * monitoring legal, ethical, risk and environmental compliance where appropriate * Act as a catalyst for change...
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