Corporate Governance

            Question 1

            Corporate governance best practices include building a qualified, strong directors board and evaluation that is based on the general performance.  This, therefore, means that the director’s board should entail individual’s directors who hold adequate knowledge and enough expertise which is relevant to the particular business. They should, therefore, be competent and qualified with strong integrity, intelligence, skills, and diverse backgrounds and with adequate time to commit to the given responsibilities.  This can, therefore, is accomplished by identification of gaps in the current director’s characteristics and qualities.  Developing an independent and an engaged director’s board is also essential as it simplifies familiarization with the duties. Therefore there should be an evaluation of the board with continued assessment (Banik,  Das, & Bhaumik, 2015). 

Another practice is defining responsibilities and roles.  This involves establishing clear accountability boundaries among the chair, board, executive management and the CEO.  Director’s subgroups are therefore given certain responsibilities through the creation of a mandate for every committee member as well as the board.  Written descriptions of positions should also be conducted which is essential in developing separate roles for each group (Banik, Das, & Bhaumik, 2015).

            The next practice is to emphasize on ethical dealing as well as integrity.  This mean that the directors are not only required to declare their  general interests on conflicts  and also refrain from the matters of voting but to hold a compete for integrity  culture when dealing with the business.  Performance evaluation and making principled decisions in regard to compensation should be practiced.  This involves the board  establishing  performance  targets that are measurable, setting  fees for directors  which eliminate  the conflict of appearance  and developing an independent  compensation committee  to oversee and develop  plans of compensation. Lastly, corporate governance should be fully engaged in risk management that is effective.  This means that the company should assess and identify risks regularly that they are bound to face. This includes operational, environmental, legal, and financial and market-related risks (Clayman, Fridson, & Troughton, 2012).

            Question 2

            Accounting standards are important in comparability, transparency, relevance and audiences.  Comparability is vital to the accounting standards role as it is the universality which is responsible for bringing to the keeping of financial records.  Governmental and nongovernmental organizations are required to follow the procedures of accounting which are the same generally.  This, therefore, results in the development of simplicity in the comparison of the financial standing.  Transparency, on the other hand, is the other significance of accounting stands as they are generally developed to enforce full organization’s transparency.  The process of accounting, as well as the principles, is designed to ensure that the organization is capable of leaning to the direction of being open and the mode of choosing how to deliver information.  Transparency is, therefore, essential and mainly in public entities. Accounting standards are effective in limiting the flexibility and the freedom of all the entities to utilize clever accounting in moving items (Clayman, Fridson, & Troughton, 2012). 

            In regard to relevance, accounting standards work to helping entities in providing relevant information in all the potential ways.  This, therefore, ensures that the information that is generated by the organization is desirable and therefore the observers are more interested in examining it.  The information provided by accounting standards   is clear and fair as it represents the present standing financial of the general operation. This, therefore, means that the organization is faced with difficult in the attempt of misdirecting the observers in fooling them with inadequate data. The general significance of the standards of accounting depends on the general value that it generates for the different audiences who observe and develop critical decisions.  The absence of standards of accounting in an organization would thus make the general work of the audiences more complex (Clayman, Fridson, & Troughton, 2012).

            Question3

            Essential steps of removing a directors board are raising concern, following the legal rights, evaluation of the performance (Wasserman, 2012). This involves the general observation of the negative impacts caused by the director’s board.  This, therefore, requires the majority votes from the board in order to satisfy that the board is not effective.  The issue should, therefore, be handled by the corporate law of the organization based on the given responsibilities and the provided evaluation of their general performance. Voting the board out of the organization is an essential step because it requires that majority of the members to be convinced of the inefficiency of the board (Wasserman, 2012).

            Raising concern and making all the members understand the issue can be achieved through ensuring that all the members are fully able to face the obligation in an equal way.  Failure of taking qualification share should also be a step of getting rid of the director’s board.  The compensation set is also essential as the rights of the directors have to be considered this is therefore guided by the given board contract which demonstrates their employment terms. Their director’s removal, therefore, does not affect their general rights of compensation in regard to the employment terms. Unfair dismissal may, therefore, provide the board with a ground to stand against the dismissal because of the violation of their basic employment rights which may general relation conflict (Wasserman, 2012).   

            Question 4

            Board members diversity is development. The diverse population is effective in generating reliable and relevant decisions that are aimed at improving the general performance of the organization. This implies that the diverse population is associated with different expertise and skills that are essential in developing solutions to the existing issues (Fernando, 2010).

            Proper management of diversity is associated with improvement in the ability of the board to develop decisions making process and enhance the capability of the organization in building abettor reputation through conveying commitments that are essential in equaling opportunities as well as inclusion.   In the board developing diversity should be grounded as a social priority and not based for those reasons that are ignored often.  Diversity is also effective in ensuring that the social responsibility is well obeyed and achieved as it aims at ensuring equality (Fernando, 2010). Board diversity benefits the organization by ensuring that it is more effective in the part of making proper decisions, developed use of the pool of talent that lies in diversity and enhancing the reputation of the organization and the relation with the investors through the establishment of the organization as a responsible corporate. A diversified board is capable of making decisions that are more equipped as they are able to consider the involved risks.  Diversified ideas help in developing a dynamic and comprehensive range of solutions.  Since finding well-established members of the board tends to be a challenge the utilization of other groups helps in ensuring that the board is not characterized by the shortage.  This helps in earning trust and loyalty from the community which is essential in building a positive image (Fernando, 2010).

            Question 5

            The role of the independence board is to evaluate and access performance and the developed decisions.  This is therefore achieved by providing leadership, setting appropriate standards, reviewing the performance of management, setting standards and values of the company and ensuring that the obligations of all the shareholders are well understood.  The board is, therefore, responsible for reviewing the agreed objectives through monitoring performance. This is by ensuring that the developed standards of compensation are followed (Kershaw, 2012). 

            The board, therefore, constructs challenges that help in improving the developed decisions as well as strategies.  Additionally, it scrutinizes the performance management in achieving the provided objectives through monitoring performance reports (Kershaw, 2012).  The board also ensures that the financial information provided is accurate as it is responsible for maintaining corporate integrity through evaluation of the general management of risks in the organization. The board, therefore, acts as the defense for the organization against all other risks that are bound to occur. This is by ensuring that the image of the organization is not damaged. Moreover, the board is responsible for determining the reasonable remunerations levels of the directions that are on the executive board. This is achieved through the evaluation of their responsibilities and capabilities of developing decisions which are aimed at ensuring that improvement is achieved.  The general role of the independent board is to provide leadership that is based on entrepreneurship with effective control measures which allows the management and assessment of risks.   Additionally, their major role incorporates setting strategic values, standards, and objectives in ensuring obligations (Kershaw, 2012).

            Question 6

            Check and balances based on power regulation can be performed on the board and this starts with the perception that any individual might abuse the availability of power which may turn a good leader into a negative leader (Fernando, 2010).  Several measures are therefore developed to ensure that all the potential people to be affected by the decisions of the board group have legal injury protection, veto power that is over the developed decisions and decision input.  This helps in protecting the general rights of the minorities as well as for all the junior staffs that are involved. Checks on power abuse involve maintaining morality and self-power regulation.  The moral checks and authority do not depend on the enforcement of the law because they are guided by the conscience of an individual.  This is mainly because when moral authority is guided by the force of the enactment of a law it might be abused by the individual leaders who are ruthless and hungry in regard to power. In addition, this can be termed as an oppression and abuse of the individual’s minds which should decide on the rights deeds.  Self-regulation generally involves the production of more than what is consumed in order to enhance full development.  The concept of self-regulation is based on the acquired skills, knowledge, morality as well as character. The checks and balances that can be applied to the board of directors mainly involve the development of democracy which helps in ensuring that the individuals are self-regulated and self-motivated (Fernando, 2010).

            Question 7

            A successful CEO must be a credible individual.  When a CEO loses his poor his credibility it can never be regained. This, therefore, implies that when one has the credibility they are necessitate telling the general truth at all times without fail (Rezaee, 2008).   People should believe in the CEO all the times when he communicates to them about the developed objectives. This is because   few chances of delivering information that is incredible are required in losing the credibility totally.  It requires complex strategies to try and win the trust of individuals because distrust cannot be gotten a lead of completely.  This, therefore, implies that once the entire credibility is lost one can never be successful. Competence is the other characteristic of a successful CEO. One can never be credible and yet be a person who holds no competence.  This is because the individuals are fully capable of believing in all your objectives statements because they know that they are true but they actually know that the statements are wrong.  This is because without competence an individual is bound to make ill-informed statements of delivering information characterized by poor judgments.  This, therefore, implies that when those that the CEO is leading fails to believe in his judgment this generally mean that he cannot be able to influence their general behaviors.  This may develop the ignorance attitude thus eliminating the ability to understand and respond to the responsibilities (Rezaee, 2008).

            A successful CEO must also be a caring person. These, therefore, mean that those that he leads must believe in the messenger as we’ll as the delivered message.  When a leader has competence but he does not care about the general organization, the employees and the involved mission this means that he will not lead the organization to success.  Caring means that the CEO should place the organization above all other things. Placing self-interest above the organization demonstrates a lack of obligation towards the objectives and the vision of the organization.  A caring CEO is essential as he helps individuals in forming a commitment attitude based on the developed rules (Rezaee, 2008).

            Question 8

            A CEO should earn 300 times more than all the other employees. This is because he or she is someone who is generally in charge of the organization and this implies that he normally takes the vast majority of the business associated executive decisions (Hallock, 2012).  To be a successful CEO one is required to hold desirable social skills, and possess the capability of being an effective leader who is no afraid of developing decisions. The specifications of being a CEO are therefore complex and only a few individuals can sustain the.  The CEO is faced with the burden of the entire organization as he is involved in decision making of every sector.  E is, therefore, accountable for the failure and the success of the organization which means that he is always under great pressure.  The CEO is fully responsible for developing organization’s direction which means that he has to develop a strategic plan in his duties of leading, overseeing and guiding performances. The CEO position, therefore, comes with complex responsibilities with long stressful hours as the Company has to be prioritized above all other things.  Since it is the job of the CEO to ensure that all the responsibilities are conducted by the employees following the decisions, they require being appreciated in a reasonable way in terms of salary. This, therefore, places their salaries above the salaries of the other employees as their focus is based on the success of the organization. In addition, the rest of the employees are only involved in performance and not on other complex responsibilities of sustaining success (Hallock, 2012).

            Section Two

            Question 1

            The corporate should be governed by the board as its typical point of central governance (Stout, 2012).  The board is essential in creating a better relationship to the rest of the primary participants who are the shareholders as well as the management.  Several other participants are also included who are the consumers, suppliers, creditors and the employees. The corporate should thus be governed by the developed framework. The board should, therefore, ensure that it is fully involved in the acts of guiding, piloting and steering as its major responsibilities. The corporate depends on the success of the board as the develop decisions helps in maintain accountability (Stout, 2012).

            Question 2

            Accounting regulation matters because it helps in ensuring that the shareholders receive an accurate statement which is not characterized irrelevant data.  This additionally helps in enhancing the corporate image through maintaining transparency of data to the observers. This creates reliance and loyalty through the delivered information.  Regulation is also essential in comparing of financial statements thus drawing a well-developed conclusion based on the information analysis.  Financial accounting and financial disclosure are most essential standards of accounting as they are the general language that is utilized in communicating information situation of the corporation. The standards, therefore, determine the appropriate language that is to be utilized in communication (Banik, Das, & Bhaumik, 2015). 

            Question 3

            A board change is important in enhancing development (Stout, 2012).  This is because when the board  serves a company for a long term they  adopts the strategy of performing things their own way,  they only consider only those things that matter to them as essential and they only focus on the provision of better services to those that they are involved in providing services to. The tendency, therefore, fails in crossing the market base as innovation and better strategies of operation are not adopted. The directors are therefore required to serve based on the term of two years to ensure that their attitude towards development is not affected (Stout, 2012).

            Question 4

            Board directors should be evaluated through their member’s skills, age, independence, competence, diversity and the general size of the board. Independence of the board is required in maintaining cleanness which is the general accountability characteristic. When the board is associated with many insiders it is bound to be faced with issues of accountability as communication may be affected. The presented skills should be evaluated to ensure that the given responsibility will be accomplished effectively.  This additionally helps in increasing innovation and advancement through generating comprehensive decisions.  The board should, therefore, report to an independent board in order to allow its responsibilities and performance to be evaluated fairly (Bacchini, Caputo, & Dell'Utri, 2014).

            Question 5

            Outside directors should be used to eliminate the accountability and transparency issues (Thorndike, 2012). This is because inside directors perform responsibilities based on the strategies that are effective for them. They, therefore, fail in honoring and prioritizing the organization before everything else.  Outside directors work to ensure that fresh initiatives that are grounded in technology and comprehensive decisions are established.  Diversity matters because it helps the identification of business challenges and developing solutions through the creation of change.  This, therefore, helps in improving the organization’s financial performance as the presented skills help in developing the corporate performance.  Diversity is also essential as it assists in investing positive relation between the organization and the community (Thorndike, 2012).

            Question 6

            The risk is assessed in the corporation by identifying the involved threats, analyzing or the basic evaluation of all the risks that are associated with the threat and determining the most suitable ways of controlling and eliminating the threat. The process involves examining the corporate and establishing things, process, situations and other things that may result in harming individuals.  The identification is then followed by evaluation how the risks can be served and developing the best possible measures in overcoming the risks. Risks should be managed by the director’s board as it is responsible for developing decisions that provide guidance to the corporation (Kershaw, 2012).

            Question 7

            The moral responsibility of a CEO is establishing the ethical issues that are generated by technological advances in order to maintain the reputation of the corporation (Kershaw, 2012).  This responsibility involves developing reliable strategies of communication to all the involved individuals. This means that the corporation should be able to meet its social responsibility in an effective and reasonable way. The CEO should be measured by their ability to sustain their social skills, the capability of developing and implementing decisions, innovativeness, competence, expertise and the capability of placing the interest of the organization first.  This helps in ensuring that the CEO will enhance full growth and development t the organization (Kershaw, 2012).

 

            Question 8

            Fair compensation can be described as a just and reasonable payment in terms of the amount of money that an individual receives for the general work that they have provided or to be paid due to the loss or the occurrence of damages.  This is determined by the employment contract law which helps in evaluating what an individual is to receive. On the other hand, the compensation can be determined by the accomplishment of an individual based on the given responsibilities. Performance term is also crucial in determining fair compensation as that individual who has served the organization for the longer time period are bound to get more (Stout, 2012).

            Question 9

            I learned that corporate governance is the mode by which the organization policies itself.  It is a strategy of governing the corporation and it is purposed to improve the accountability capacity of the organization in avoiding the occurrence of massive disasters. Well managed corporate governance should work to ensure that it eliminates issues by implementing appropriate solutions that are aimed at providing maximum benefits to the organization.  Corporate governance is a business aspect that is essential as it helps in the distribution of responsibilities to ensure that performance is developed.  Corporate management, therefore, helps in setting objectives and guiding the organization how best they can be achieved (Brown, Hallenbeck, Baird, 2015).

 

            References

            Bacchini, F., Caputo, S., & Dell'Utri, M. (2014). New advances in causation, agency and moral responsibility.

            Banik, A., Das, G. A., & Bhaumik, P. K. (2015). Corporate governance, responsibility and sustainability: Initiatives in emerging economies.

            Brown, T. J., Hallenbeck, R., Baird, M. E., American Association of State Highway and Transportation Officials., National Research Council (U.S.)., & Oasis Consulting Services. (2009). 21st century leadership and management techniques for state DOTs. Washington D.C: AASHTO.

            Clayman, M. R., Fridson, M. S., & Troughton, G. H. (2012). Corporate finance: A practical approach.

            Fernando, A. C. (2010). Business ethics and corporate governance. Delhi: Dorling Kindersley (India), licensees of Pearson Education in South Asia.

            Hallock, K. F. (2012). Pay: Why people earn what they earn and what you can do now to make more. Cambridge: Cambridge University Press.

            Kershaw, D. (2012). Company law in context: Text and materials. Oxford, U.K: Oxford University Press.

Rezaee, Z. (2008). Corporate governance and ethics. Hoboken, N.J: Wiley.

            Stout, L. A. (2012). The shareholder value myth: How putting shareholders first harms investors, corporations, and the public. San Francisco: Berrett-Koehler.

            Thorndike, W. (2012). The outsiders: Eight unconventional CEOs and their radically rational blueprint for success

            Wasserman, N. (2012). The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. Princeton: Princeton University Press.